DoE policy points to end of missionary electrification charge

By Victor V. Saulon – February 25, 2019 | 10:22 pm
from Business World

THE Department of Energy (DoE) signed what it called an omnibus missionary electrification policy for off-grid areas that will serve as a framework for future circulars that will end the collection from consumers of the universal charge for missionary electrification (UCME).

“Signed. For publication,” DoE Undersecretary Felix William B. Fuentebella said in a Viber message on Monday when asked about the status of the policy, which he previously said would be signed by end-2018.

When asked whether the provisions of the policy are in line with a DoE draft late last year, he said: “No changes I think.”

Mario C. Marasigan, director of the DoE’s Electric Power Industry Management Bureau, confirmed the signing of the policy.

“The Omnibus Guidelines on Enhancing Off-Grid Development and Operation was signed on Jan. 25, 2019,” he said in a text message.

Mr. Fuentebella earlier said that the circular on UCME would be more detailed than the general provisions included in the omnibus framework, which he said covers 15 sections and 19 pages.

The DoE is assuring consumers that future electrification programs will not be charged to consumers, but will be shouldered by the government, he said, adding that the move would answer persistent questions about why inefficiencies are charged to them.

He did not discuss the funding required by the government to cover rural energization without the UCME, but said it would be part of the state’s total electrification program and aligned with the plans of the National Power Corp. (Napocor) and the National Electrification Administration (NEA).

Napocor’s legal mandate is to provide power in areas that are not connected to the transmission grid. The UCME is collected from all on-grid electricity end users as determined by the Energy Regulatory Commission (ERC) and called for under Republic Act No. 9136 or the Electric Power Industry Reform Act of 2011, or EPIRA.

For 2019, Napocor had sought in July provisional approval to collect up to P17.8 billion from electricity users or an increase to P0.1948 per kilowatt-hour (kWh) in their power consumption.

In its petition filed before the ERC, Napocor said the amount it is seeking to collect will result in an increase of P0.0768 per kWh from the previous rate.

The government-owned and-controlled corporation 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.

Mr. Fuentebella said distribution utilities in off-grid areas would be given a transition period of two to five years without the UCME.

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