Eastern Petroleum executive scores NPC plan to increase power rates

by Lenie Lectura – January 26, 2016

from Business Mirror

EASTERN Petroleum Corp. on Tuesday questioned the National Power Corp.’s (NPC) motives to hike power rates by P0.0788 per kilowatt hour (kWh).

Fernando Martinez, Eastern Petroleum chairman, cited the continued decline in domestic- and international-fuel prices by as much as 60 percent in the last 18 months. He said this should be reason enough not to approve NPC’s latest rate hike.

“Given the substantial decrease in fuel costs, we strongly believe that their operational costs should have decreased and their existing Universal Charge for Missionary Electrification of P0.0454/kWh should suffice to eventually recoup their under-recoveries in the last two years,” Martinez said in a statement.

He said NPC should instead maintain its current charges and reduce the subsidies it allocates for missionary electrification.

He also added that he is willing to attend hearings to be set by the Energy Regulatory Commission (ERC) and question how the state firm derived these figures.

“Napocor [NPC] should review its operational costs and the subsidies it allots to its Small Power Utilities Group given that domestic- and international-fuel prices have been on a 12-year low. Thus, why should consumers be burdened by these alleged under-recoveries borne out of their incompetence?” Martinez asked.

In its petition, NPC said the additional costs would help them recoup almost P6 billion in alleged under-recoveries for its missionary- electrification subsidies.

“The said petition is proposing to recover P5,895,588,224.47 shortfall for the year 2014. This translates to a true-up adjustment rate of P0.0788 kWh per month,” NPC said in its petition.

NPC President Gladys Cruz-Sta. Rita reiterated that the filing would not automatically increase the rates. A series of public hearings would still be conducted by the ERC to determine if an approval should be given.

“The petition is a regular application based on the actual expenses as against the actual approved revenue and sales from missionary areas and the universal charge for missionary electrification,” she said.

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