Napocor says off-grid power plants to get P1.6-B infusion

Business World Online

Posted on September 01, 2011 10:58:30 PM

THE DEBT-SADDLED National Power Corp. (Napocor) has reportedly been granted P1.6 billion from the government’s share in Malampaya natural gas earnings to continue funding off-grid power facilities.

SOME of the government earnings from the natural gas field in offshore Palawan seen here will be funneled to the National Power Corp., which will in turn use the funds to bankroll the operations of off-grid power plants it manages. -- BW FILE PHOTO

“We got another shot in the arm, so to speak, from the national government: an additional P1.6 billion from Malampaya,” Napocor President Froilan A. Tampinco yesterday told reporters in a chance interview.

This, as the government has a 10% stake in the Malampaya gas field extraction through state-run Philippine National Oil Co.-Exploration Corp.
Napocor will receive the amount by today, Mr. Tampinco claimed.

“This is something we would utilize to tide us over up to the end of the year,” he said.

The amount will be complemented by the additional P0.0693 per kilowatt-hour (kWh) charge it proposes to collect from consumers. The petition has yet to be decided on by regulators.

The additional charge is expected to provide Napocor with P4.299 billion for off-grid areas according to earlier reports.

The ERC approved last month a P0.0709/kWh universal charge for missionary electrification (UCME) for Napocor to recover about P4.15 billion for operations. This will be realized in the September billing of off-grid area consumers. This amount is significantly lower than the expected P0.2759/kWh. Napocor has said the approved amount only covers the debts it has from fuel suppliers.

Mr. Tampinco said it will be able to operate its off-grid facilities efficiently with the funding it has received.

“The entire P1.6 billion will cover three major components in the Small Power Utilities Group (SPUG). We were also able to get P2 billion from advances from the Bataan Nuclear Power Plant. So we have about P3.6 billion on hand for SPUG,” said Mr. Tampinco.

Earlier this year, four SPUG areas ran out of fuel after suppliers refused to let Napocor get fuel on credit anymore. These are the Casiguran diesel power plant in Aurora, Cuyo diesel power plant in Palawan, power barge 108 in Tawi-Tawi, and the Camotes diesel power plant in Cebu.

Napocor manages and operates 157 power utilities in off-grid areas with a combined capacity of 200 megawatts (MW). It needs about P7 billion to P9 billion to efficiently run SPUG operations in areas not connected to the main grid according to earlier reports.