Govt releases funds to plug off-grid deficit

Manila Times.net
Written by : EUAN PAULO C. AÑONUEVO REPORTER


THE government has released funds to help state-owned National Power Corp. plug the budget deficiency of its off-grid operations.

On the sidelines of a forum, Froilan Tampinco, Napocor president, said the government allocated P1.60 billion in royalties from the Malampaya field, the country’s largest natural gas producer, for the power firm’s Small Power Utilities Group (SMG).

“We got another shot in the arm, so to speak from the national government—an additional P1.60 billion so this is something we would utilize to tide us over up to the end of the year,” he said.

The amount would be used to partially cover for the purchase of fuel and spare parts, and the payment for generator set rentals of Napocor-SPUG, which provides power in remote areas and off-grid islands that are not connected to the country’s main grid.

Tampinco said that SPUG’s supplementary budget was approved only a week ago and would be released sometime this week.

Napocor is in a bind on how to finance its off-grid operations after regulators approved a fraction of a rate hike it sought to subsidize SPUG.

Although the government earlier released P2.00 billion in Malamapaya royalties to help Napocor’s finances, the amount was used primarily to reimburse the company’s past costs.

“From our perspective, that is just reimbursement of our advances. We were making advances on the preservation of the [Bataan] nuclear plant,” Tampinco said.

The areas served by SPUG mostly have limited markets to attract private power producers. As such, Napocor has to rely on adjustments to the universal charge for missionary electrification (component of consumers’ power bills to finance SPUG.

The Energy Regulatory Commission approved only a P0.07 per kilowatt-hour rate hike to allow Napocor to recover fuel and foreign currency exchange costs worth P4.15 billion incurred from 2006 to 2009.

Napocor sought a P0.28 per kilowatt-hour rate increase to recover the shortfall in revenues resulting from higher fuel costs and foreign exchange fluctuations, and a 12-percent return on rate base to cover the company’s working capital from 2003 to 2009.

In a recent petition, Napocor asked the ERC for a P0.07 per kilowatt-hour rate increase in the UCME to allow it to cover P4.30 billion needed for SPUG’s operations.