Friday, February 25, 2011

Napocor negotiates for fuel deliveries to SPUG areas

Business World Online
Posted on February 25, 2011 07:04:29 PM

THE NATIONAL Power Corp. (Napocor) has concluded negotiations with fuel suppliers to resume deliveries of fuel to off-grid areas.

Napocor President Froilan A. Tampinco said in a statement that Napocor negotiated with Pilipinas Shell Petroleum Corp., Petron Corp. and Filpride Resources, Inc. to resume fuel deliveries which were stopped after the agency could no longer pay its obligations.

The state-owned firm committed to pay its obligations to the suppliers "once it receives some financial relief from the national government."

"Due to budget constraints, Napocor has indeed been experiencing some problems with the fuel supply of the [Small Power Utilities Group (SPUG)] areas, but we wish to assure the public that we are already undertaking several mitigating measures to address the matter," said Mr. Tampinco.

He added only four of the 157 power plants in SPUG areas ran out of fuel.

These are the Casiguran diesel power plant in Aurora, the Cuyo diesel power plant in Palawan, power barge 108 in Tawi Tawi, and the Camotes diesel power plant in Cebu.

The Energy Regulatory Commission (ERC) has approved the third generation rate adjustment allowing Napocor to charge an additional P0.949 per kilowatt hour (kWh) in Luzon SPUG areas, P1.195/kWh in the Visayas and P1.468/kWh in Mindanao.

This replaces the provisional authority earlier granted by the ERC to Napocor to increase rates by P0.50/kWh implemented in the January billing period.

On Jan. 14, Napocor-SPUG filed for an increase of P1.3163 per kilowatt hour (kWh) under its generation rate adjustment mechanism and P0.1982/kWh under the incremental currency exchange rate adjustment for SPUG areas. The increases were based on deferred costs for fuel and foreign exchange that Napocor sought to recover.

Napocor also sought higher missionary universal charges of P0.23/kWh from the ERC to have operational efficiency in SPUG areas. The regulator approved a P0.0454/kWh charge in September last year.

Recently some SPUG areas received help from local government units through loans which will be offset through its power bills.

"We also wish to acknowledge the invaluable assistance given to us by the local government units and the electric cooperatives who have agreed to advance the payment for the fuel requirements of the SPUG plants in their areas, as was the case in Cebu and Siquijor, and soon, in Palawan and Romblon," said Mr. Tampinco.

Napocor said it is also expecting "at least P2 billion, or half of the P4.367 billion that Napocor had advanced for the preservation and maintenance of the Bataan Nuclear Power Plant."

Electricity end-users subsidize SPUG areas through the universal charge for missionary electrification. -- 
Emilia Narni J. David

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