posted January 27, 2016 at 11:10 pm by Alena Mae S. Flores
An oil industry executive said
Wednesday National Power Corp.’s bid to increase the universal charge should
not be allowed, given the drastic drop in fuel cost.
Eastern Petroleum chairman and chief
executive Fernando Martinez said he was referring to the application of Napocor
to recover almost P6 billion from consumers, which would translate into a power
rate hike of P0.0788 per kilowatt-hour under the universal charge for
missionary electrification.
He questioned Napocor’s motive to
increase the rate, in the wake of low domestic and international fuel prices
that fell by as much as 60 percent over the last 18 months.
“Given the substantial decrease in
fuel costs, we strongly believe that their operational costs should have
decreased and their existing universal charge for missionary electrification of
P0.0454 per kWh should suffice to eventually recoup their under-recoveries in
the last two years,” Martinez said in a statement.
He said Napocor should instead
maintain its current charges and reduce the subsidies it allocated for
missionary electrification.
Martinez said as a consumer, he was
willing to attend hearings on Napocor’s petition filed with the Energy
Regulatory Commission and question how Napocor derived the figures.
“Napocor should review its
operational costs and the subsidies it allots to its small power utilities
group given that domestic and international fuel prices have been on a 12-year
low. Thus, why should consumers be burdened by these alleged under-recoveries
borne out of their incompetence?” Martinez asked.
Napocor earlier filed a petition
with ERC to hike the universal charge on consumers to recover nearly P6-billion
shortfall in the missionary electrification subsidy in 2014.
Napocor proposed to recover P5.895
billion, representing the funding shortfall in 2014.
Napocor president Ma. Gladys Sta.
Rita said in a statement the petition was based on the actual expenses, as
against the actual approved revenue and sales from missionary areas and the
universal charge for missionary electrification.
Sta. Rita said the application would
“still pass through the process of public hearing and the commission’s
evaluation and approval before implementation.”
Napocor said the huge shortfall in
2014 was due to the very low basic universal charge for missionary
electrification at P0.0454 kWh, which translated into only P2.7 billion per year.
The state firm said the filing was
one of two sources of the corporation’s funds as allowed under the Electric
Power Industry Reform Act of 2001.
These include the universal charge
for missionary electrification which is to be collected from all electricity
consumers and energy sales collected from electric cooperatives.
Napocor said the petition was
consistent with ERC Resolution 21, series of 2011, which amended the guidelines
for the setting and approval of electricity generation rates and subsidies for
missionary areas.
This provided that if the
reconciliation resulted in Napocor’s small power utilities group having a
deficiency, as confirmed by the ERC, it should be entitled to an increase in
the UC-ME to cover the shortfall.
Sta. Rita also said that an
additional funding through the approval of the instant petition would ensure an
uninterrupted electricity supply as this would fully augment the funding
requirements of Napocor.
She said given the increasing demand
for energy and in line with the government’s thrust of economic development in
the off-grid areas, availability of funding through the universal charge for
missionary electrification particularly for fuel requirements would enable
Napocor to optimize the use of available plant capacity.
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