Napocor seeks higher power rates for off-grid customers

MANILA, Philippines - The National Power Corp. (Napocor) has sought the approval of the Energy Regulatory Commission (ERC) to increase rates charged to off-grid customers to enable it to recover costs.

In applications filed with the ERC, Napocor-Small Power Utilities Group (Napocor-SPUG), proposed to recover P3.58 billion for fuel and P583.26 million for foreign currency exchange cost it incurred last year.

It will be noted that Napocor is highly-subsidizing most of the costs from SPUG operations. For instance, if an off-grid production cost amounts to P15 to P20 per kilowatthour (kwh), customers normally pay only P5 per kwh (based on a current average rate todate).

Napocor uses the missionary electrification fee being charged from Manila Electric Co. (Meralco) customers to subsidize these off-grid operations.

Based on the Napocor applications, the amount it seeks to recover includes carrying charges worth over P180 million due to the length of time before the power firm could recover the costs.

SPUG is the missionary generation and remote area electrification unit of the power firm. These SPUG areas are not connected to the main transmission grid, thus making electricity supplied to the areas a bit expensive.

It would still be up to the ERC if it will approve the Napocor rate application but under normal cases the regulator allows a recovery at a reasonable level or at cost which will not burden customers.

Under the applications of the recovery of Napocor-SPUG’s fuel cost, each off-grid area wil have different rates if approved by the ERC.

In Mindoro, for instance, rates would increase by P4.03 per kwh; Marinduque, P4.83 per kwh; Palawan, P8.06 per kwh; Catanduanes, P4.17 per kwh; Tablas, P6.69 per kwh; and Romblon, P4.34 per kwh. These areas have existing basic rates of P5.64 per kwh.

In Masbate, rates will be jacked up by P8.61 per kwh; Tawi-Tawi, P3.07 per kwh; Basilan, P7.43 per kwh; and Sulu, P5.07 per kwh from their current rate of P5.12 per kwh.

Camotes and Siquijor’s rates would be increased by P4.92 per kwh and P8.93 per kwh, respectively, from P6.26 per kilowatt-hour.

On the other hand, other off-grid areas in Luzon, Visayas and Mindanao would increase their rates by P5.41 per kwh, P5.77 per kwh and P5.95 per kwh, respectively, from P3.71 per kwh, P5.64 per kwh and P4.80 per kwh

On top of higher rates, these areas would also have to shoulder a 88 centavos per kwh increase over the proposed recovery period to account for Napocor-SPUG’s forex costs.

These proposed adjustments fall under Napocor’s 5th Generation Rate Adjustment Mechanism (GRAM) and 5th Incremental Currency Exchange Rate Adjustment (ICERA) -rate adjustment schemes prescribed by the ERC.

These allow the power firm to recover from or refund its customers any increase or decrease in its costs of producing electricity in the previous months.