Napocor seeking to recover P10.3b

by Alena Mae S. Flores – May 15, 2016 at 11:10 pm

from Manila Standard Today

State-owned National Power Corp. is seeking to recover P10.324 billion from customers for subsidies it spent in building power facilities in remote areas.

Napocor said in a published petition filed before the Energy Regulatory Commission the amount would translate into an increase of P0.1248 per kilowatt-hour starting 2016 under the universal charge for missionary electrification.

Napocor said the proposed basic universal charge for missionary electrification was “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 including a sufficient subsidy for payment to new power players/qualified third parties and renewable energy developers.”

It said there was a need to meet the customer’s electricity requirements through the implementation of the proposed improvement of Napocor’s generation function to provide a sustainable development in off-grid areas and connect electricity to unserved communities.

Napocor said the lack of funds from the universal charge for missionary electrification subsidy and from supposedly transitory funds which could be sourced through loans would affect its funding and operation.

“Be it recalled that the Department of Justice issued an opinion which limited and suspended Napocor’s authority to borrow funds or enter into a loan agreement,” it said.

Napocor calculated the application based on the 2015 results of operations and fuel costs for 2017, operating expenses, depreciation costs and calculated revenues.

“In the instant petition, petitioner has utilized the authorized RORB methodology  using the year 2015 base rate being the most recent financial statement available during the calculation stage,” it said.

The application also included the renewable energy cash incentive for off-grid developers.

“Based on the results of the calculations made, the total proposed UCME subsidy requirement for the missionary electrification will amount to P10.324 billion for CY 2017 inclusive of the cash incentive for renewable energy,” Napocor said.

Napocor last year filed an application for the basic universal charge for missionary electrification for 2015 and 2016 before ERC in support of its missionary electrification function.  The application is still pending with ERC.

Napocor’s operating funds do not come from the national government but mainly from two sources, including the universal charge from missionary electrification which was collected from all electricity end-users nationwide and from subsidized approved generation rate which is collected from electric cooperatives in off-grid islands.

Napocor is mandated under the Electric Power Reform Act of 2001 to provide electricity to missionary electrification areas around the country.

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