National Power Corporation (NPC) will reduce power delivery in Small Power Utilities Group (SPUG) areas beginning on February 1, 2023 due to the lack of fuel supplies and a delay in the subsidy payment of the Universal Cost for Missionary Electrification (UC-ME).
The delayed reimbursement of UCME costs has been pending with the Energy Regulatory Commission (ERC) for several years. As a result, NPC is now unable to secure the necessary funding for the purchase of fuel needed to operate the thermal plants that supply power to the SPUG areas.
The UCME specifically refers to a separate line item that is added to all electric bills, which is then used to provide financial assistance for the electricity service being provided to SPUG districts.
The reduction of power service will result in prolonged periods of power outages or a major power crisis that will cause distress for consumers in areas that have been dealing with frequent disruptions to electricity service for a significant amount of time.
Officials from relevant energy agencies met on Tuesday, January 17, 2023 for a consultative meeting to address the power supply issues related to SPUG.
“NPC apprised the attendees that they already have a crisis management and communication plan which was approved by the National Power Board to address the supply curtailment and the delay in UCME subsidy payments,” the National Electrification Administration (NEA) said in a statement.
NPC President Fernando Martin Roxas stated that they requested a Php 5 billion loan specifically for fuel purchases.
However, the loan may not be released until May. Due to this, Roxas asked if the electric cooperatives (ECs) could assist by making an advance payment for fuel.
In light of that development, NEA Administrator Antonio Mariano Almeda directed deputy administrator for technical services Atty. Omar Mayo, “to coordinate with NPC regarding the advance payment of the ECs as part of the short-term solution to the problem.”