DBM releases P1.62B to Napocor

Manila Bulletin

By CHINO S. LEYCO

September 4, 2011, 8:00am

MANILA, Philippines — The Department of Budget and Management (DBM) has released P1.62 billion to the National Power Corporation (Napocor) to prevent imminent power shortages in far-flung areas across the country.

Budget and Management Secretary Florencio B. Abad said the fund was released to urgently address the Napocor’s capability to provide stable power supply in off-grid areas, some of which have already experienced sporadic brownouts due to fuel supply constraints.

“The government is now preparing for its next steps in ensuring stable and affordable power supply to remote areas,” Abad said, noting that a fund release for the sitio electrification project is now being processed.

He added that the released of the fund was upon the instruction of President Benigno S. Aquino III.

Of the P1.62 billion, P1.32 billion will be used to address the fuel requirements of Napocor’s Small Power Utilities Group (SPUG); P162.5 million, which is half of Napocor’s capital expenditure for 2011, for the purchase of spares for SPUG plants; and P140 million for the lease of generator sets for SPUG areas.

The release has been charged against the Malampaya Fund.

A total of P3.6 billion has been released for NPC-SPUG this year, to be offset against the claims of Napocor for reimbursement of its advances in the preservation and maintenance of the Bataan Nuclear Power Plant (BNPP).

In February, P2 billion was released for the fuel requirements of Napocor-SPUG.

Napocor has claimed for the reimbursement of its advances incurred in the preservation of the BNPP starting 1986 amounting to P4.37 billion as of December 2010.

SPUG is the missionary electrification arm of Napocor that operates 317 generating units with total rated capacity of 147.675 MW in 86 areas. This nationwide operation serves 78 island grids and 8 isolated grids catering 3,330 barangays in 192 municipalities across the country.

Froilan Tampinco, Napocor president said the missionary operations on remote islands, including Siquijor, Masbate, Marinduque, Basilan, and Sulu, need P1.6 billion per month or P6.34 billion until yearend.

Tampinco said Napocor may be ‘constrained to reduce its operating hours or to shut down entirely some of its generating plants" if it is unable to get the P1.6 billion needed per month.