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After a long wait, state-owned National Power Corp. (Napocor) has
finally filed a petition before the Energy Regulatory Commission (ERC)
for adjustments in generation and foreign exchange rate in a move to
bring down power rates in the country.
The petition refers to Napocor’s 9th
Generation Rate Adjustment Mechanism (GRAM) and 8th Incremental
Currency Exchange Rate Adjustment (ICERA) covering the billing
period July to December 2006. It includes as well its application
for revised basic generation rates for Luzon, the Visayas and
Mindanao grids.
On the average, the combined applications will
result in a decrease of about P0.0006 per kilowatt-hour for the
country’s power rates and in the regions, around P0.0362 per
kilowatt-hour in Luzon and P0.0039 per kilowatt-hour in Mindanao.
But the Visayas grid, on the other hand, will have an increase of
around P0.1591 per kilowatt-hour.
Once ERC approves the petition, Napocor, which
sells electricity to the country’s electric utilities and large
industries, will further reduce its average rate of P4.06 per
kilowatt-hour.
Prior to Napocor’s filing, however, the ERC
had issued a show-cause order asking the power firm to explain why
it failed to file its GRAM and ICERA applications covering the
period July 2006 to March 2008, spanning a longer period than its
petitions.
The ERC estimated that Napocor’s GRAM and
ICERA applications are worth P10 billion, which translates to a
P0.20 per kilowatt-hour over-recovery for the period it is seeking.
But the GRAM, which allows Napocor to adjust its
generation rate to reflect changes in fuel and purchased power
costs, and ICERA, which allows it to adjust its rates based on forex
fluctuations, are culled on a periodic basis of about six months.
The application for a basic rate adjustment, on
the other hand, reflects the impact of the privatization of a number
of Napocor’s power plants under the government’s power sector
privatization thrust.
Napocor earlier said that the delay in its
filings was due to additional requirements from the regulatory body
that have long been scrapped because of amendments to the Electric
Power Industry Reform Act of 2001.
This includes having to publish its application
for adjustments in newspapers as well as furnish these to concerned
local government units.
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