Business World Online
Posted on August 31, 2011 10:25:40 PM
NATIONAL POWER Corp. (Napocor) has asked the Energy Regulatory Commission (ERC) for an additional increase in the universal charge for "missionary electrification" (UCME) totaling P0.0693 per kilowatt-hour (kWh) -- equivalent to P4.3 billion -- on top of the P0.0709/kWh provisionally granted last Aug. 1, "to prevent the shortage of fuel and consequent shutdown of power plants" in areas outside the main grid.
In its filing with ERC, dated Aug. 15, Napocor also asked ERC to provide a return-on-rate base that will enable its Small Power Utilities Group (SPUG) to guarantee continuous service in off-grid areas.
ERC provisionally approved last Aug. 1 a P0.0709/kWh UCME for Napocor to recover about P4.15 billion -- or about P359 million a month -- in various operation costs. That amount, to be reflected in the bills of consumers in the main grid starting this month, adds to the P0.0454/kWh consumers have already been paying in UCME.
Napocor, which had originally sought a P0.2759/kWh increase in this UCME, argued that the additional charge provisionally approved last Aug. 1 covered only about 34% of costs for fuel price fluctuations in 2006-2009.
"While the provisional authority alleviated, to some extent, financial woes…the petitioner respectfully manifests that the additional P359 million a month cannot support continuing operation in off-grid areas," the petition read.
Napocor said it "still requires" projected additional funds totaling P1.609 billion a month, or some P6.346 billion until the end of this year alone, "in order to sustain its operations" in off-grid areas.
Napocor said that, "to date," SPUG now has outstanding payable to fuel and other suppliers totaling P360 million and P11.6 million, net of value-added tax and income tax withheld, respectively.
Napocor’s capability to pay for its costs was dealt a blow when the Justice department, in an opinion it issued on Aug. 17 last year, barred it from issuing bonds or incurring loans to fund off-grid power generation projects or to pay for its debts. Hence, Napocor said, it could "no longer guarantee settlement on due date" of P3.164 billion in promissory notes from the Land Bank of the Philippines maturing on Aug. 31, Sept. 30 and Oct. 31 this year.
It noted that "SPUG’s fuel and other suppliers are becoming hesitant in participating and submitting bids due to uncertainty of…payment."
It added that surcharges and interest charges on its delayed payments to fuel and other suppliers have been "contributing to the increase of its unrecoverable expenses."
In the same petition, Napocor also asked ERC to provide sufficient return-on-rate base (RORB) to provide at least two months worth of cash working capital. It noted that Republic Act No. 7648, or the Electric Power Crisis Act of 1993, had allowed for even a 12% RORB. "Without reasonable RORB…SPUG’s financial capability of sustaining its operation will be drastically impaired." -- ENJD
ERC provisionally approved last Aug. 1 a P0.0709/kWh UCME for Napocor to recover about P4.15 billion -- or about P359 million a month -- in various operation costs. That amount, to be reflected in the bills of consumers in the main grid starting this month, adds to the P0.0454/kWh consumers have already been paying in UCME.
Napocor, which had originally sought a P0.2759/kWh increase in this UCME, argued that the additional charge provisionally approved last Aug. 1 covered only about 34% of costs for fuel price fluctuations in 2006-2009.
"While the provisional authority alleviated, to some extent, financial woes…the petitioner respectfully manifests that the additional P359 million a month cannot support continuing operation in off-grid areas," the petition read.
Napocor said it "still requires" projected additional funds totaling P1.609 billion a month, or some P6.346 billion until the end of this year alone, "in order to sustain its operations" in off-grid areas.
Napocor said that, "to date," SPUG now has outstanding payable to fuel and other suppliers totaling P360 million and P11.6 million, net of value-added tax and income tax withheld, respectively.
Napocor’s capability to pay for its costs was dealt a blow when the Justice department, in an opinion it issued on Aug. 17 last year, barred it from issuing bonds or incurring loans to fund off-grid power generation projects or to pay for its debts. Hence, Napocor said, it could "no longer guarantee settlement on due date" of P3.164 billion in promissory notes from the Land Bank of the Philippines maturing on Aug. 31, Sept. 30 and Oct. 31 this year.
It noted that "SPUG’s fuel and other suppliers are becoming hesitant in participating and submitting bids due to uncertainty of…payment."
It added that surcharges and interest charges on its delayed payments to fuel and other suppliers have been "contributing to the increase of its unrecoverable expenses."
In the same petition, Napocor also asked ERC to provide sufficient return-on-rate base (RORB) to provide at least two months worth of cash working capital. It noted that Republic Act No. 7648, or the Electric Power Crisis Act of 1993, had allowed for even a 12% RORB. "Without reasonable RORB…SPUG’s financial capability of sustaining its operation will be drastically impaired." -- ENJD
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