• Napocor seeks higher rates for off-grid operations

The National Power Corp. (Napocor) is asking power regulators to approve a higher rate for off-grid consumers on account of additional excise taxes on fuel under the Tax Reform for Acceleration and Inclusion (TRAIN) Law.

In its 19-page petition to the Energy Regulatory Commission (ERC), Napocor proposed an increase in its subsidized approved generation rate (SAGR) of P0.8293 per kilowatt-hour (kwh) in areas under its coverage due to excise tax.

“The proposed increase in SAGR averaging P0.8293 per kwh due to excise tax will result to an additional projected SAGR revenue amounting to P463 million for calendar year 2018. This is about 16 percent of the existing SAGR level,” it said.

Broken down per island grid, Napocor customers in Luzon will see an increase of P0.9392 per kwh increase in 2018, P1.4609 per kwh in 2019 and P1.0648 per kwh in 2020.

Visayas customers will see an additional P1.0499 per kwh in 2018, P1.6294 per kwh in 2019 and P2.2084 per kwh in 2020.

Meanwhile, an increase of P0.6703 per kwh will be reflected in bills of Mindanao customers, P1.4793 per kwh in 2019 and P1.9835 per kwh in 2020.

Until 2020, customers in Luzon will see a total increase of P1.8884 per kwh, Visayas customer with P2.2449 per kwh and Mindanao customers with P2.1383 per kwh.

With the enactment of the TRAIN Law, Napocor said electricity prices would be affected since Napocor-Small Power Utilities Group (SPUG) uses diesel and bunker fuels in its power plants.

Effective 2018, the tax reform law imposed a P2.50 excise tax on bunker fuel oil and diesel oil per liter. This is expected to increase to P4.50 and P6 in 2019 and 2020, respectively.

Napocor said these would translate to an increase in the operating cost in the SPUG areas.

As a result of the TRAIN Law, the fuel cost will increase by P0.8293 per kwh in CY 2018, P1.4815 per kwh in CY 2019, P1.9919 per kwh in CY 2020.

The impact of the increase in fuel cost will greatly affect Napocor’s power plant operations if the corresponding cost will not be immediately recovered by Napocor as incurred,” Napocor said.

Napocor said island consumers will “not be overburdened” by the increase in SAGR since recently imposed third Generation Rate Adjustment Mechanism and third Incremental Currency Exchange Rate Adjustment translated to a reduction of P0.9492 per kwh for Luzon, P1.1950 per kwh for Visayas, and P1.4680 per kwh.