Napocor seeks power hike in off-grid areas

State-run National Power Corp. seeks to increase power rates in off-grid areas across the country to recover some P1.9 billion in fuel and foreign exchange costs incurred by its Small Power Utilities Group (SPUG).

Based on the applications filed at the Energy Regulatory Commission, the Napocor-SPUG wanted to collect an additional P1.6957 per kilowatt-hour in Luzon; P1.4364 per kWh in the Visayas; and P1.6168 per kWh in Mindanao, representing the 8th installment of both the Generation Rate Adjustment Mechanism (GRAM) and the Incremental Currency Exchange Rate Adjustment (Icera).

The applications cover Dec. 26, 2010 to June 25, 2011.

GRAM is a mechanism that allows utilities such as Napocor to recover costs associated with fuel and purchased power, while the Icera allows utilities to recover foreign exchange-related costs. These mechanisms are consistent with the principles of free and competitive electricity market as provided under the Electric Power Industry Reform Act (Epira).

The Napocor-SPUG, the state generator’s missionary electrification arm that provides electricity to remote islands and remote communities, said it hoped to collect the additional amounts within two years.

It is critical for Napocor-SPUG to recover its costs so that it will have sufficient funds to address its operational expenses, particularly fuel, and maturing obligations.

The Napocor-SPUG currently operates 232 generating units with a total generated capacity of about 175 megawatts (MW). It serves 214 island and isolated grids providing electricity to 47 customers, consisting of 39 electric cooperatives, seven local government units and one multipurpose cooperative.  Amy R. Remo