Napocor gets ERC clearance to collect higher fees; power rates seen increasing

Business World Online

Posted on November 23, 2012 08:42:11 PM

THE ENERGY Regulatory Commission (ERC) has specified the recovery periods for the collection of the rate adjustments by National Power Corp. (Napocor) in off-grid areas.

In separate decisions released on Nov. 22, the ERC authorized Napocor to recover its costs for the third generation adjustment rate mechanism (GRAM) and third incremental currency exchange rate adjustment (ICERA) over specific periods.

GRAM and ICERA are components of the Deferred Accounting Adjustments (DAA) in Napocor’s power rates. The ERC said that GRAM is for the deferred fuel costs, while ICERA is based from foreign exchange rate fluctuations.

The ERC has approved the third GRAM cost recovery amounting to P1.963 billion.

For Luzon customers, this translates to an additional P0.5585 per kilowatt-hour (kWh) to be recovered over a period of five years and four months; for Visayas, P0.8043/kWh to be recovered over four years and nine months; and for Mindanao, P1.0773/kWh to be recovered within a year.

“The implementation of these existing adjustments will just have to be extended to allow recovery of DAA amounts approved in these decisions,” ERC Executive Director Francis Saturnino C. Juan said in a text message yesterday.

On the other hand, the approved third ICERA amounting to P341.418 million, which is equivalent to P0.3907/kWh will be recoverable over a period of two years.

The Napocor-SPUG Web site shows electricity rates in these areas now range from P5.7516/kWh to P7.4503/kWh.

The new orders are modification of the regulator’s approval granted on January 2011. “In the previous decision, we have not set a recovery period. The commission only determined the appropriate rate. The rate will be the same,” Mr. Juan said.

He added that the commission mitigates the impact of the GRAM and ICERA by spreading it over a longer period of time.

“The orders will no longer have rate impact since its the same rate impact that are already being implemented under the previous approval,” Mr. Juan concluded.

The provinces that are considered off-grid areas are Mindoro, Batangas, Marinduque, Quezon, Palawan, Catanduanes, Albay, Romblon, Batanes, Cagayan, Aurora, Apayao, Kalinga, Isabela, Camarines Sur, Masbate, Cebu, Siquijor, Antique, Iloilo, Leyte, Biliran, Samar, Basilan, Sulu, Dinagat, Sultan Kudarat, Davao, Surigao del Norte, Zamboanga and Tawi-Tawi. -- Claire-Ann Marie C. Feliciano    source