Napocor: No power-rate hike adjustment during Christmas

by Lenie Lectura – December 10, 2015

from Business Mirror

THE National Power Corp. (Napocor) on Thursday assured the public that there is no power-rate hike adjustment that will be implemented in off-grid areas being served by its Small Power Utilities Group (SPUG) this holiday.

The state firm said this after Party-list Rep. Neri Colmenares of Bayan Muna vowed to block Napocor’s rate-hike proposal and said that this impending adjustment will dampen the holiday season.

“We really should help each other to stop this. We are now coordinating with the ERC [Energy Regulatory Commission] as to the status of the Napocor petition and we are set to file a motion to intervene to stop these rate hikes,” Colmenares said.

Early this month Napocor filed an application for recovery-cost adjustments with the ERC. It proposed to increase its rate by P2.0627 per kilowatt-hour (kWh) in Luzon, P2.3236 per kWh in the Visayas and P1.4534 per kWh in Mindanao.

The proposed rates, it said, reflect additional operating costs incurred by Napocor-SPUG as a result of the fluctuation of fuel prices used in power generation. Napocor is allowed to recover this deferred fuel costs through the Generation Rate Adjustment Mechanism (GRAM).

If approved, the proposed rates will be implemented over two years to fully recover P1,892,748,606 worth of deferred fuel costs to mitigate the impact to Napocor customers in the missionary areas.

Napocor President Ma. Gladys Cruz-Sta. Rita said it normally takes at least one year before any petition may be acted upon, because any petition has to undergo several public hearing before getting endorsed.

“Napocor normally files its rate adjustment every year to recover the adjustments in fuel costs and dollar exchange, but it is not automatically or immediately approved. And with the ERC’s intervention, there is hardly an increase in the rates granted to Napocor. It is usually spread out over several years,” she said.

In fact, the ERC-approved basic fuel cost that Napocor is collecting from its power consumers is still based on year 2003 level of oil prices. So, imagine the huge difference in dollar and fuel rates,” she explained.

Sta. Rita said that, in the past 10 years, basic power rates that Napocor is collecting from its missionary areas remain the same.

“Let me reiterate that these are actual adjustments in allowable fuel cost based on ERC Heat Rate Cap and dollar exchange,” Sta. Rita said.

Moreover, Napocor’s applications will undergo public hearings and all interested parties can participate by filing interventions or oppositions.

Sta. Rita said the operational funds of Napocor do not come from the national government. Thus, calls to block the needed power-rate recovery petitions will only mean reduction in cost recoveries for funding SPUG operations, which eventually will lead to power interruptions and the inability to pay for fuel deliveries to SPUG plants and subsidy requirements of New Power Providers/Qualified Third Parties.

She said Napocor would welcome the participation of lawmakers and other sectors in ensuring that power services in the off-grid areas are maintained and well-served.