Napocor appeals P13.3b recovery charges from off-grid customers

The National Power Corp. (Napocor) has filed a petition asking to recover over P13B next year from customers in missionary areas for subsidies used in off-grid power generation.

The state organization, in a filing statement with the Energy Regulatory Commission (ERC), requested for a provisional authority for the universal charge for missionary electrification (UCME) of P13.3 billion for 2018.

“The need to fulfill Napocor’s commitment to providing efficient operation of its plant consistent with the specific programs in the missionary areas that Napocor is currently serving. Napocor operates numerous small power plants. Small Islands and Isolated Grids (SIIGs) are relatively very expensive,” Napocor said.

Napocor’s proposed charges will cover projected fuel costs, operating expenses, demand and cash incentives for renewable energy (RE) developers in off-grid areas next year.

From the current UCME rate of P0.1163 per kilowatt-hour (kWh), it will go up to P0.153 per kWh as a result.

“The proposed basic UCME rate of P0.153 per kWh inclusive of RE Cash Incentive for CY 2018 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 including a sufficient subsidy for payment to NPPs (new power producers) / QTPs (qualified third parties) and RE developers,” it said.

The Electric Power Industry Reform Act (EPIRA) of 2001 mandates that the UCME is collected from consumers to provide electricity in remote locations not connected to the main transmission grid.

Napocor is operating through its off-grid unit Small Power Utilities Group (SPUG) to meet customers’ energy requirements by improving its power generation in off-the-grid communities.