Power rate hike looms

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The National Power Corp. is asking the Energy Regulatory Commission that it be allowed to recover P1.66 billion in fuel and foreign exchange costs from consumers in far-flung and poor areas under the Small Power Utilities Group (SPUG).

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It is estimated that consumers in Luzon will have to pay an additional P1.8279 per kilowatt-hour (kWh) for their electricity consumption while those in the Visayas will pay an additional P2.1585/kWh and those in Mindanao will shell out P1.4654/kWh more.

The P1.66 billion additional expense was incurred in the second half of 2013.

Napocor explained that the new charges are covered by deferred accounting adjustments called generation rate adjustment mechanism (GRAM) and incremental currency exchange rate adjustment (ICERA).
The GRAM covers deferred fuel costs incurred by operating small power plants in SPUG areas, while the ICERA covers losses from foreign exchange rate fluctuations.

In its GRAM petition, Napocor said this covers deferred costs from July to December 2013 and involves recovery of P1.652 billion over two years, while the ICERA involves recovery of P8.996 million over 12 months through an additional charge of P0.0194/kWh in all SPUG-covered areas.

The state-run power agency pointed out that these charges will be on top of current electricity rates in off-grid areas ranging from P4.8024/kWh to P6.2553/kWh based on the latest Napocor-SPUG data.
Among the areas considered off-grid are Mindoro, Marinduque, Palawan, Romblon, Masbate, Siquijor, Zamboanga, Sulu and Tawi-Tawi.

Republic Act 9136, or the Electric Power Industry Reform Act of 2011, mandates SPUG to provide electricity to remote barangays and villages or areas not connected to the country’s power grid.

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