Napocor says approved power rates not enough

Manila Standard Today

by Alena Mae S. Flores

State-owned National Power Corp. has filed an appeal with the Energy Regulatory Commission to recover P4.299 billion from electricity customers equivalent to at least P0.0693 per kilowatt-hour to guarantee its operation in missionary or far-flung areas.

Napocor said the ERC’s provisional approval authorizing the company to recover the universal charge for missionary electrification amounting to P359 million per month or P1.436 billion starting this month until the end of the year was not enough to sustain the operations of the Small Power Utilities Group.

Napocor said it still needed P1.6 billion per month or P6.34 billion until the end of 2011 to sustain its operation and pay the guaranteed subsidy to power suppliers in the missionary areas.

It said ERC’s provisionally approved P4.146 billion equivalent to P0.0709 per kilowatt-hour approved early last month was limited to only about 34 percent of Napocor-SPUG’s incremental costs for fuel fluctuations for 2006 to 2009.

Napocor-SPUG said it was experiencing financial dilemma due to accumulated and unsettled financial obligations with fuel and other suppliers as well as loans due for payment.

“Napocor-SPUG may still be constrained to reduce its operating hours or to shut down entirely some of its generating plants,” it said.

It added its capability to bridge finance its operating costs had been restricted due to the Justice Department’s opinion disallowing Napocor to issue bonds or other forms of indebtedness.

“With the restrictions...it [Napocor] would again result to the reduction of operating hours and series of brownouts in the off-grid areas. Further, Napocor-SPUG’s fuel and other suppliers are becoming hesitant in participating and submitting bids due to uncertainty of Napocor-SPUG’s payment,” it said.

It said surcharges from the delay of payment was affecting Napocor’s finances and contributing to the increase in unrecoverable expenses.

Napocor-SPUG said it had an outstanding payable to fuel and other suppliers amounting to P360 million and P11.6 million, respectively.