Napocor seeks ERC nod to hike power rates

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The state-owned National Power Corp. (Napocor) has filed separate petitions with the Energy Regulatory Commission (ERC) to raise its rates across the country in a bid to recover some P7.3 billion in foreign exchange losses and deferred fuel costs, among others.
In one petition, Napocor is seeking approval to raise its rates by an average of P1.8788 per kilowatt-hour (kWh) for consumers that are served by its Small Power Utilities Group (SPUG).

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Napocor said this proposed rate increase is for the recovery of fuel costs amounting to P1.83 billion incurred from January to June 2013. The fuel costs were incurred by operating small power plants in off-grid areas through SPUG.

If the petition is approved, Napocor consumers in SPUG areas in Luzon will have to pay an additional P2.1097 per kWh, those in SPUG areas in the Visayas will pay an additional P1.9125 per kWh, while those in SPUG areas in Mindanao will be charged an additional P1.4873 per kWh.

To ease the impact of the rate hike, Napocor has proposed to recover the P1.83 billion in fuel costs over a two-year period.

Meanwhile, Napocor also asked the ERC to allow it to recover P5.46 billion covering the universal charge for its missionary electrification. The recovery being sought is equivalent to a rate hike of P0.0769 per kWh, which it proposes to implement over 12-month period.

This added monthly rate of P0.0769 per kWh, to be collected from nationwide electricity consumers, will be on top of the approved universal charge for missionary electrification (UC-ME) for 2014.

In explaining its rate hike petitions, the state-owned power distributor said it incurred
additional operating costs in the performance of its missionary electrification through SPUG as a result of the fluctuation of fuel prices used in power generation.

Napocor is allowed to recover the additional costs incurred through the generation rate adjustment mechanism.

“The amount proposed for recovery is already an incurred cost of NPC and within the reasonable cost of servicing the consumers in the missionary areas, considering the nature of operation and the level of demand in the off-grid areas,” Napocor said.

“The proposed deferred accounting adjustment will reflect the recent costs authorized under the generation rate adjustment mechanism, and NPC would increase the revenue commensurate with its cost and ultimately reduce the burden of UC-ME on all electricity end-users,” it said.

In justifying its rate hike petitions, Napocor said recovering the P7.3 billion in foreign exchange losses and fuel costs would help the state-owned firm fund its operations.

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