ERC wants public hearings on Napocor’s rate hike bid

The Energy Regulatory Commission (ERC) is seeking industry inputs for the recovery of over P1.6 billion from on-grid consumers sought by state-run National Power Corp. (Napocor) for foreign exchange (forex) and operational costs incurred in the delivery of power to missionary areas.

The ERC has published notices of public hearings for Napocor’s 17th application for incremental currency exchange rate adjustment (ICERA) and recovery charges under generation rate adjustment mechanism (GRAM).

ICERA allows recovery of costs on foreign exchange rate fluctuations that affect the costs of servicing foreign currency debts and/or foreign exchange-related expenses such as insurance and imported power plant or transmission parts.

GRAM seeks to recover deferred fuel costs and power purchase costs incurred in providing power to Napocor-Small Power Utilities Group (SPUG) areas.

Napocor is seeking P17.66 million in deferred fuel costs, deferred debt service, operating expenses and the corresponding carrying charges incurred from January to December 2016.

This proposed recovery will translate to an additional charge of P0.0243 per kilowatthour (kwh) in the monthly bills of end-consumers in missionary areas.

Meanwhile, in its GRAM application, Napocor is seeking to recover P1.58 billion in deferred fuel costs incurred from January to December 2016.

To recover this amount, it proposed the imposition of additional charges of P1.0343 per kwh for off-grid customers in Luzon, P0.8009 per kwh for those in the Visayas and P0.9862 per kwh for those in Mindanao for two years.

Napocor said the GRAM would increase its revenue “commensurate with its cost and ultimately reduce the burden of the UCME on all electricity end-users.”

The UCME, or the universal charge for missionary electrification, is collected from endusers to subsidize the electrification of remote communities or areas not connected to the main transmission grid.

In its notices, ERC is asking industry stakeholders to file petitions for intervention, opposition or comments for Napocor’s applications.

“All persons who have an interest in the subject matter of the instant case may become a party by filing with the Commission a petition for intervention at least five days prior to the initial hearing,” it said.

ERC spokesperson Floresinda Digal said parties given the status of intervenor can present witnesses as well as cross-examine the other party’s witness.

“All other persons who may want their views known to the Commission with the subject matter of the case may file their opposition or comment at any stage of the proceedings,” the regulator said.

Under the ERC Rules of Practice and Procedure, only the applicant, petitioner, complainant, respondent or intervenor are parties to a proceeding.

The ERC has set hearings for both applications on Sept. 21 at its head office in Pasig City; Sept. 28 in Cebu City; Oct. 3 in Davao City; and Oct. 10 at its head office.

Under the Electric Power Industry Reform Act (EPIRA) of 2001, Napocor is mandated to provide power generation and its associated power delivery systems in areas not connected to the transmission system, specifically remote villages in Mindanao, Palawan and Mindoro.

This is being done through Napocor-SPUG, which incurs additional operating costs as a result of the fluctuation in fuel prices used in power generation. It currently has 275 SPUG plants.