Government allots P1.6B to Napocor

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THURSDAY, 01 SEPTEMBER 2011 21:09 PAUL ANTHONY A. ISLA / REPORTER

CASH-STRAPPED National Power Corp. (Napocor) got a much-needed shot in the arm from the national government to sustain its operations for the rest of the year.

Napocor President Froilan Tampinco said they have been allotted P1.6 billion by the national government which they intend to spend “to tidy us up over to the end of the year.”

Tampinco said the allocation has been approved last week and will be disbursed to them within the week.

He added allocation will be sourced from the Malampaya proceeds and will be similar to the P2 billion earlier disbursed to them as reimbursement for their cost to maintain the Bataan Nuclear Power Plant. “For us it’s really just a reimbursement of our advances in preserving the Bataan Nuclear Power Plant,” he said.

Tampinco said P1.3 billion of the P1.6 billion will be spent to fund fuel expenses for its Napocor-Small Power Utilities Group’s (Spug) operations.

Half of the balance, according to Tampinco, will be spent for critical spares and the rest to pay off generator-set rentals.

In its petition recently filed with the Energy Regulatory Commission (ERC), Napocor-Spug is seeking an additional adjustment of at least 6.93-centavo per kilowatt-hour (kWh), or an equivalent P4.3 billion, be allowed for recovery from all electricity customers.

The additional cost will enable Napocor-Spug to continue its operations in remote areas, and to prevent the shortage of fuel and consequent shutdown of the power plants.

It has been recently granted by the ERC a provisional authority to collect an additional 7.09-centavo per kWh from consumers through the universal charge for missionary electrification (UCME). To date, Napocor-Spug collects 11.63-centavo per kWh from consumers through the UCME.

The Napocor-Spug also asked ERC for the approval of the return-on-rate base (RORB) to allow it to guarantee continuous operation in remote areas, saying the provisional authority did not provide for the 12-percent RORB that would allow for at least two months cash working capital, for the unrecovered operating expenses and for the capitalized maintenance expenses of the generating plants.

The Napocor-Spug argued that its financial capability of sustaining its operations will be drastically impaired without a reasonable RORB.

It added that Napocor-Spug paid new power providers (NPP) with a total subsidy amounting to P693.6 million last year that resulted in a deficit of P334.6 million from the approved amount of P310 million for the same year.

From January to July this year, Napocor-Spug said its actual payment of NPP subsidy that includes claims for prior years’ adjustment amount to P498 million, while the approved UCME subsidy to NPP for 2010 to 2013 is only P310 million per year.

The Napocor-Spug said it still has additional projected requirements up to year-end of about P527 million based on the ERC-approved true cost generation rate and projected energy sales for NPPs.