P5-B loan to back SPUG operation
The DoE and Napocor are also working with the Development Budget Coordination Committee to program funds that would support Napocor’s funding deficit for this year
The National Power Corporation or Napocor and the Department of Energy are seeking a special authority grant from President Ferdinand “Bongbong” Marcos Jr. to hasten the P5-billion loan from government financial institutions that will buy fuel to provide electricity to poor rural areas.
At a press conference on Monday, Energy Secretary Raphael Perpetuo Lotilla pointed out that Marcos’ backing is crucial in securing financial assistance to support the operations of Napocor.
Napocor’s unit Small Power Utilities Group or SPUG which supplies electricity to missionary areas or those that are not expected to generate profit has indicated that power supply in some areas will have to be suspended due to the high cost of fuel as Napocor is running out of funds.
“The DoE and Napocor are also working with the Development Budget Coordination Committee to program funds that would support Napocor’s funding deficit for this year, which amounts to P14.205 billion,” Lotilla said.
Earlier, the Napocor warned that rural areas powered by SPUG may experience intermittent power supply in the coming months because it has to slash their allocated reserves amid shortages and delays in subsidy distribution.
The Napocor initially planned to implement electricity service reduction in SPUG areas starting in February due to fuel supply shortage and the delay in Universal Cost for Missionary Electrification or UCME subsidy payment.
However, Napocor president Fernando Martin Roxas said the state-run agency deferred the implementation by March.
Roxas said the P5 billion loan will be earmarked solely for fuel purchases, which will help offset the constraints in Napocor’s Corporate Operating Budget.
Contingency plans bared
As part of its contingency plans, the Napocor said it has secured last week the approval of the DBM to use last year’s P1.112-billion national government subsidy to cover due and demandable fuel payables.
The national government subsidy is a special provision in the General Appropriations Act authorizing the use of subsidy release for programs and projects to cover the additional funding requirements of activities or projects under the agency’s program.
As of 26 January, Napocor’s outstanding fuel payables for the operation of Napocor SPUG power plants and barges amount to P1.031 billion for billing months covering November to December 2022.
Meanwhile, its payables to NPPs and QTPs clocked in at P5.508 billion — equivalent to about three to four months of unpaid and demandable billings.
Swift ERC action sought
The Energy Regulatory Commission is currently reviewing the petition by Napocor on the UCME of about P0.15/kWh.
Lotilla said he is expecting the ERC to expedite its review as the proposed UCME rate is the commitment of Napocor to ensuring the required volume of fuel will be timely paid to suppliers.
If approved by the ERC, he said the proposal will help Napocor to deliver its commitment to provide a reliable and sufficient power supply and efficient operation of its plants and associated power delivery systems consistent with the specific programs in the missionary areas that Napocor is currently serving.