Napocor seeks P 17 billion in missionary electrification charges for 2019

Increase in power rates seen as effect of TRAIN law

The National Power Corp. (Napocor) filed a petition with the Energy Regulatory Commission (ERC) for an additional P0.0768/kWh in the universal charge for missionary electrification (UCME) next year.

The government-owned firm is seeking to collect a total of P 17.8 billion from electricity users to cover electrification of “far-flung areas” of the country.

Napocor said the proposed basic UCME “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.”

If approved, consumers will be charged a total of P0.1948 per kilowatt-hour (/kWh) in their power bills under the UCME provision.

It said the amount includes subsidy for payment to new power providers, renewable energy developers and qualified third-parties that have taken over in full or in part the power generation function of Napocor in certain areas.

Napocor is mandated by law to provide power in areas that are not connected to the country’s transmission grid.

“There is a need to meet the customer’s electricity requirements through the implementation of the proposed improvement of [Napocor’s] generation function aimed to provide a sustainable development in the off-grid areas and be able to connect electricity to the unserved communities in the far-flung areas,” its said.Napocor said lack of funds from the UCME subsidy “will definitely affect flexibility in [the company’s] funding and operation.”

In its petition, Napocor computed the proposed UCME based on projected fuel cost for 2019, which was derived from the actual 2017 fuel cost in peso per kilowatt-hour multiplied by projected energy sales. Many of the plants in off-grid areas are diesel-fueled.

It also factored in the excise tax on fuel based on next year’s projected quantity/volume multiplied with approved rate of P4.50 per liter under R.A. No. 10963 or the Tax Reform for Acceleration and Inclusion, or TRAIN law.

Operating expenses, cost of personnel services, and depreciation were also part of the computed costs.

Napocor provided a breakdown of its proposed use of the P17.8 billion petitioned collection: around P9.4 billion for its own use; P7.99 billion for new power providers; P190.75 million for qualified third-parties; and P224.71 million as cash incentives for renewable energy developers.

The UCME is collected from all on-grid electricity end users under Republic Act No. 9136, or the Electric Power Industry Reform Act of 2011 (EPIRA).

 

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