Napocor seek­ing big­ger mis­sion­ary elec­tri­fi­ca­tion charge for next year

Business World - - FRONT PAGE - Vic­tor V. Saulon

THE NA­TIONAL POWER CORP. (Napocor) is seek­ing pro­vi­sional ap­proval to col­lect a to­tal of P17.8 bil­lion from elec­tric­ity users next year, through a P0.1948 per kilo­watt-hour (/kWh) charge in their power bills, to cover elec­tri­fi­ca­tion of “far-flung ar­eas” of the coun­try.

In the pe­ti­tion it filed with the En­ergy Reg­u­la­tory Com­mis­sion (ERC), Napocor said the univer­sal charge for mis­sion­ary elec­tri­fi­ca­tion (UCME), as found in con­sumers’ monthly elec­tric­ity bill, will re­flect an in­crease of P0.0768/kWh from the cur­rent amount.

The govern­ment- owned and - con­trolled firm said the pro­posed ba­sic UCME “is nec­es­sary in or­der to cover the re­quired sub­sidy re­quire­ments and at the same time, main­tain a re­li­able and sta­ble fund­ing source for its op­er­at­ing costs re­quire­ments.”

It said the amount in­cludes sub­sidy for pay­ment to new power providers, re­new­able en­ergy de­vel­op­ers and qual­i­fied third-par­ties that have taken over in full or in part the power gen­er­a­tion func­tion of Napocor in cer­tain ar­eas.

Napocor is man­dated by law to pro­vide power in ar­eas that are not con­nected to the coun­try’s trans­mis­sion grid.

The UCME is col­lected from all on­grid elec­tric­ity end users un­der Repub­lic Act No. 9136, or the Elec­tric Power In­dus­try Re­form Act of 2011 (EPIRA).

“There is a need to meet the cus­tomer’s elec­tric­ity re­quire­ments through the im­ple­men­ta­tion of the pro­posed im­prove­ment of [Napocor’s] gen­er­a­tion func­tion aimed to pro­vide a sus­tain­able de­vel­op­ment in the off-grid ar­eas and be able to con­nect elec­tric­ity to the un­served com­mu­ni­ties in the far-flung ar­eas,” its said.

Napocor said lack of funds from the UCME sub­sidy “will def­i­nitely af­fect flex­i­bil­ity in [ the com­pany’s] fund­ing and op­er­a­tion.”

In its pe­ti­tion, Napocor com­puted the pro­posed UCME based on, among oth­ers, pro­jected fuel cost for 2019, which was

de­rived from the ac­tual 2017 fuel cost in peso per kilo­watt- hour mul­ti­plied by pro­jected en­ergy sales. Many of the plants in of­f­grid ar­eas are diesel-fu­eled.

It also fac­tored in the ex­cise tax on fuel based on next year’s pro­jected quan­tity/ vol­ume mul­ti­plied with ap­proved rate of P4.50 per liter un­der R.A. No. 10963 or the Tax Re­form for Ac­cel­er­a­tion and In­clu­sion, or TRAIN law.

Napocor also con­sid­ered other costs, in­clud­ing op­er­at­ing ex­penses, cost of per­son­nel ser­vices and de­pre­ci­a­tion.

Napocor pro­vided a break­down of pro­posed use of the P17.8 bil­lion it seeks to col­lect: around P9.4 bil­lion for its own use; P7.99 bil­lion for new power providers; P190.75 mil­lion for qual­i­fied third-par­ties and P224.71 mil­lion as cash in­cen­tives for re­new­able en­ergy de­vel­op­ers.

Small is­lands in the coun­try are of­ten not con­nected to the main grid be­cause they are not fi­nan­cially fea­si­ble for hav­ing low lev­els of power de­mand, low pop­u­la­tion den­sity and ge­o­graph­i­cal con­straints. —

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