Napocor to seek ERC approval to recoup P4B through UCME

Business Mirror
SUNDAY, 11 MARCH 2012 19:59 PAUL ANTHONY A. ISLA / REPORTER


GOVERNMENT-RUN National Power Corp. (Napocor) is set to file a petition to recoup P4 billion through the universal charge for missionary electrification (UCME), which it spent for the missionary electrification functions of its small power utilities group (SPUG).
Froilan Tampinco, Napocor president, told reporters they will have a new filing for the UCME, which seeks to recover P4 billion that they spent in 2010 to fund SPUG operations all throughout the country.


The P4 billion, according to Tampinco, will have an equivalent of P0.06 per kilowatt-hour (kWh).


Tampinco said they intend to recover the amount for a period of one year.


He added that the new UCME being applied for would replace the existing P0.07/kWh which is set to expire in July this year.


Last year, Napocor-Spug has been provisionally allowed by the ERC to collect an additional P0.07/kWh from consumers through the UCME. To date, Napocor-Spug collects P0.1163/kWh from consumers through the UCME.


The Napocor-Spug also asked ERC for the approval of the return-on-rate base (RORB) to allow it to guarantee continuous operation in remote areas.


The Napocor-Spug said the provisional authority did not provide for the 12 percent RORB that would allow for at least two months cash working capital, for the unrecovered operating expenses and for the capitalized maintenance expenses of the generating plants.


The Napocor-Spug argued that its financial capability of sustaining its operations would be drastically impaired without a reasonable RORB.


It added that Napocor-Spug paid new power providers (NPP) with a total subsidy amounted to P693.6 million last year that resulted in a deficit of P334.6 million from the approved amount of P310 million for the same year.


From January to July this year, Napocor-Spug said its actual payment of NPP subsidy that includes claims for prior years’ adjustment amount to P498 million, while the approved UCME subsidy to NPP for 2010 to 2013 is only P310 million per year.


The Napocor-Spug said it still has additional projected requirements up to year-end of about P527 million based on the ERC-approved true cost generation rate and projected energy sales for NPPs.


It noted that its total cash deficit that will be attributed to the full payment of subsidy to NPP will account to about P715 million.