Manila Times.net
Published : Tuesday, November 22, 2011 00:00 Written by : KRISTA ANGELA M. MONTEALEGRE
State-owned National Power Corp. will privatize four off-grid areas.
On the sidelines of the Philippine-Korea Business Forum, Department of Energy Secretary Rene Almendras told reporters that the agency has identified four Napocor-Small Power Utility Group areas for privatization, including Palawan, Mindoro and Masbate, which represent 40 percent of the total SPUG capacity.
The government is set to meet with interested parties next week for the SPUG sector.
Almendras said the House of Representatives has endorsed the supplemental budget for Napocor, on top of what was approved under the General Appropriations Act, to cover SPUG’s fuel needs.
“Senate assured us that there would be no problem. The money is there it’s just that you need a supplemental budget,” the DOE chief said.
The government would likely spend P3.6 billion next year, the same amount it spent in 2010, for SPUG areas, Almendras said.
SPUG provides power in remote areas and off-grid islands—so-called missionary areas since they don’t enjoy access to commercial power plants.
The areas that SPUG serves mostly have limited markets that discourage private power producers.
Power rates in the SPUG areas are highly subsidized and result in significant losses for Napocor every year.
The privatization of SPUG areas could help lower power rates for customers serviced by the main grids who take on part of the cost of the subsidy program.
SPUG would need about P15 billion to fund its operations next year.
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