Napocor seeks fresh rate hike for missionary areas

Manila Times.net
Published : Saturday, December 03, 2011 00:00 Written by : Euan Paulo C. Añonuevo, Reporter


STATE-OWNED National Power Corp. has asked regulators for an increase in electricity rates in off-grid areas to allow the company to recover past fuel and foreign currency exchange costs.
Napocor filed its application for the 7th Generation Rate Adjustment Mechanism and 7th Incremental Currency Exchange Rate Adjustment (Icera) before the Energy Regulatory Commission. The two are collectively called deferred accounting adjustments, or previous costs incurred by Napocor that have yet to be collected from customers.


“The amount we are proposing to be recovered in the 7th GRAM and 7th Icera are actual historical costs that we have incurred in generating electricity that we sell to our customers and consumers,” the company said in a statement.


Napocor aims to recover about P3.12 billion in total DAAs, comprising P3.08 billion for the 7th GRAM and P45.85 million for the 7th Icera. However, annual recovery will be reduced to an average of P780 million due to a proposed spread.


Napocor’s filings will translate to upward adjustments in current Napocor rates in the missionary areas in Luzon by P2.14 per kilowatt-hour, in the Visayas by P1.54 per kilowatt-hour, and in Mindanao by P1.08 per kilowatt-hour.


These, in turn, will result in corresponding upward adjustments to effective rates in these areas, from P7.18 per kilowatt-hour to P9.10 per kilowatt-hour. Napocor proposed to recover the amount over a spread of four years, to cushion its impact on consumers in 78 islands and eight isolated areas in the country that are not connected to the main grid.


The electricity rates in these areas are subsidized by consumers through the universal charge component of their electricity bills. The ERC earlier approved a P0.07 per kilowatt-hour rate hike in the universal charge this year to allow Napocor to recover fuel and foreign currency exchange costs worth P4.15 billion from 2006 to 2009.


Napocor had sought a P0.28 per kilowatt-hour rate increase to recover the shortfall in revenues resulting from higher fuel costs and foreign exchange fluctuations, and a 12-percent return on rate base to cover the company’s working capital from 2003 to 2009. Although the government earlier released P2.00 billion worth of Malamapaya royalties to help shore up Napocor’s finances, the amount was used primarily to reimburse the company’s past costs.


“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.