July 13, 2018 | 12:33 am
THE NATIONAL POWER
CORP. (Napocor) is seeking provisional approval to collect a total of P17.8
billion from electricity users next year, through a P0.1948 per kilowatt-hour
(/kWh) charge in their power bills, to cover electrification of “far-flung
areas” of the country.
In the petition it
filed with the Energy Regulatory Commission (ERC), Napocor said the universal
charge for missionary electrification (UCME), as found in consumers’ monthly
electricity bill, will reflect an increase of P0.0768/kWh from the current
amount.
The government-owned
and -controlled firm said the proposed basic UCME “is necessary in order to
cover the required subsidy requirements and at the same time, maintain a
reliable and stable funding source for its operating costs requirements.”
It said the amount
includes subsidy for payment to new power providers, renewable energy
developers and qualified third-parties that have taken over in full or in part
the power generation function of Napocor in certain areas.
Napocor is mandated by
law to provide power in areas that are not connected to the country’s
transmission grid.
The UCME is collected
from all on-grid electricity end users under Republic Act No. 9136, or the
Electric Power Industry Reform Act of 2011 (EPIRA).
“There is a need to
meet the customer’s electricity requirements through the implementation of the
proposed improvement of [Napocor’s] generation function aimed to provide a
sustainable development in the off-grid areas and be able to connect
electricity to the unserved communities in the far-flung areas,” its said.
Napocor said lack of
funds from the UCME subsidy “will definitely affect flexibility in [the
company’s] funding and operation.”
In its petition,
Napocor computed the proposed UCME based on, among others, projected fuel cost
for 2019, which was derived from the actual 2017 fuel cost in peso per
kilowatt-hour multiplied by projected energy sales. Many of the plants in
off-grid areas are diesel-fueled.
It also factored in the
excise tax on fuel based on next year’s projected quantity/volume multiplied
with approved rate of P4.50 per liter under R.A. No. 10963 or the Tax Reform
for Acceleration and Inclusion, or TRAIN law.
Napocor also considered
other costs, including operating expenses, cost of personnel services and
depreciation.
Napocor provided a
breakdown of proposed use of the P17.8 billion it seeks to collect: around P9.4
billion for its own use; P7.99 billion for new power providers; P190.75 million
for qualified third-parties and P224.71 million as cash incentives for
renewable energy developers.
Small islands in the
country are often not connected to the main grid because they are not
financially feasible for having low levels of power demand, low population
density and geographical constraints. — Victor V. Saulon
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