Napocor seeking to recoup fuel, forex costs

Business Mirror
SUNDAY, 04 DECEMBER 2011 19:20 PAUL ANTHONY A. ISLA / REPORTER


CASH-STRAPPED National Power Corp. (Napocor) said on Friday that it has filed before the Energy Regulatory Commission (ERC) a petition to recoup P3.121 billion in total deferred accounting adjustments (DAA) incurred in 2010.
The amount, according to Napocor, accounts for its fuel costs and foreign-exchange costs in running its power facilities in remote areas.


In its seventh Generation Rate Adjustment Mechanism (GRAM) and its seventh Incremental Currency Exchange Rate Adjustment (Icera) petitions, Napocor said it plans to recoup the amount in four years to mitigate its effect to consumers in off-grid areas where they operate.


Napocor seeks to recover a total of P3.121 billion comprised of P3.075 billion for the GRAM and P45.846 million for the Icera.


Napocor made it clear that the annual recovery will be reduced to an average of P780 million, based on its proposal to recoup the entire amount in four years.


When recovered in four years, Napocor said these filings will only translate into an increase of P2.1380 per kilowatt-hour (kWh) in Luzon; P1.5339/kWh in the Visayas, and P1.07777/kWh in Mindanao.


These, according to Napocor, will result in corresponding upward adjustments to state-owned power generating company’s effective rates in these areas, ranging from P7.1839/kWh to P9.1005/kWh.


“We have filed for a recovery period of four years for the seventh GRAM and seventh Icera because we do not want our consumers to be saddled with high power costs,” Napocor said.


It further explained that these filings are needed and vital because this will help alleviate Napocor’s financial position, should it gets approved by the ERC.


Napocor said the amounts they seek to recover are based on actual historical costs that have been incurred in generating the electricity they sell to customers and consumers.


Napocor said the GRAM and Icera are collectively referred to as DAAs, which are pass-through costs and do not result in profits to the company.


“We hope our consuming public understands that we have to recover these costs because it will help us sustain our operations and continue providing our services to them. In turn, we will continue to implement improvements to make our services better, more reliable and more sustainable,” Napocor said.


It also noted that these rate and adjustment applications are filed before the ERC, which has the final say whether its gets approved.


Napocor is required by the power regulator to go through the process of publications, public hearings and deliberations in the ERC, which will have the final decision whether applications gets approved.