Manila Times.net
Written by :
STATE-OWNED National Power Corp. is asking the Energy Regulatory Commission (ERC) to reconsider a decision to slash the power rate hike it sought to subsidize off-grid areas in the country.
In a petition, Napocor said the ERC approved P0.07 per kilowatt-hour rate increase in the universal charge for missionary electrification component of consumers’ power bills would not be enough to pay for off-grid operations.
Napocor said it “still requires a projected additional funds of [P6.35 billion] until the end of 2011 in order to sustain its operation and continuously pay guaranteed subsidy.”
Given this, the company asked the ERC to allow another increase in the UCME of around P0.07 per kilowatt-hour equivalent to P4.30 billion.
The UCME is a component of the monthly electricity bill, the proceeds of which defray the cost of power in the remote areas and off-grid islands under Napocor’s Small Power Utilities Group.
Napocor serves these areas, most of which have too limited markets to attract private power producers.
Napocor earlier sought a P0.28 per kilowatt-hour adjustment to the UCME to recover the shortfall in revenues resulting from higher fuel costs and foreign exchange fluctuations. The company also sought a 12-percent return on rate base to cover its working capital from 2003 to 2009.
The ERC, however, approved only a P0.07 per kilowatt-hour rate hike to allow Napocor to recover around P4.15 billion for cost adjustments from 2006 to 2009.
Napocor said the approved amount represents only 34 percent of its actual fuel and foreign currency exchange under recoveries during the period.
“With the level of recovery for fuel, it is therefore apparent that [Napocor-SPUG’s] financial viability is impaired resulting in its failure to pay the full cost of fuel on time,” Napocor said, adding that its off-grid unit “may still be constrained to reduce its operating hours or to shut down entirely some of its generating plants.”
Napocor’s financial woes has been aggravated by the Department of Justice’s opinion that the power firm cannot issue bonds or incur additional debts to settle its arrears with fuel suppliers.
Before the DOJ issued its opinion, Napocor tapped loans from the Land Bank of the Philippines in 2009 and in 2010 to pre-fund its working capital requirements and pay off fuel suppliers.
“However, after several extensions requested from Land Bank, promissory notes amounting to P3.16 billion are maturing and already due for payment on staggered basis this August 31, September 30 and October 31,” Napocor said.
Although it can request for another extension, Napocor said it would have to absorb penalties and interest charges.
No comments:
Post a Comment