Low crude prices won’t impact on power rates — Napocor

State-owned National Power Corp. (Napocor) said yesterday the recent reduction of world crude prices would have a minimal impact on its power rates, a ranking Napocor official said yesterday.

Napocor tariff manager Edgardo Orencia said the company is, in fact, utilizing less of its oil-fired power plants in an effort to do away with the use of expensive imported fuel oil.

The Napocor official issued this statement amidst claims that the country’s largest state-run power producer should lower its rates considering the drop in world crude prices.

Orencia explained that while the trading of price of Dubai crude in the world market tumbled significantly in October from $24 per barrel to $18 per barrel, it had a little effect on Napocor’s power rates.

He said the share of bunker fuel in the total generation mix or the fuel consumption mix of Napocor was only 23 percent.

Based on the power firm’s generation mix for October 2001, the share of bunker fuel rose a little to 23 percent from 19 percent in the same period last year.

The same data showed that diesel’s share was placed at 1.04 percent. It was noted that the oil mix figures were comparatively lower than the share of coal which stood at 52 percent in October this year from 59 percent in the same period in 2000.

According to Orencia, for the past years, Napocor’s reliance on oil-fired plants had been significant at more than 50 percent. But this was eventually reduced with the entry of more economical baseload coal power plants.

For the past two years, bunker fuel oil share in the generation mix of Napocor was trimmed to between 16 to 20 percent. The Napocor official said the power firm had made significant strides in curbing power rate adjustments by referring in May to July this year its purchased power adjustments.

On the issue of overcharging which the Senate committee on energy will investigate next week, Napocor clarified that the firm had always been transparent in the computation of its rates.

"We are regularly submitting reports to the Energy Regulatory Commission," he said.

He noted that power rates remain high in the region due to embedded subsidies and the significant share of the purchased power from the independent power producers (IPPs).