Napocor mulls rate hike early next year

The National Power Corp. is looking at the possibility of applying for a rate increase before the Energy Regulatory Commission (ERC) early next year, Napocor acting president Roland S. Quilala said.

Quilala said Napocor’s tariff division is in the process of collating the data to support the application for rate hike. "We are seriously consideirng our plan to increase our rates. We will probably do it in the first quarter next year," he said.

The Napocor chief, however, declined to reveal how much rate increase the power firm will ask the ERC.

According to Quilala, the rate increase will reduce the impact of the lower unbundled rate approved by the ERC last Sept. 9 this year. "Based on our overall computation, our net loss will balloon to about P70 billion in end-December 2003 if we will implement the reduced unbundled rate approved by the ERC," he said. As of end-July 2002, Napocor’s net loss amounted to P17.4 billion.

Under Republic Act 9136 or the Electric Power Industry Reform Act of 2001, all distribution utilities, including Napocor, will have to apply for the unbundling of their rates with the ERC. An itemized or unbundled rate will allow the end-users of electricty to have a clearer view of where their electricity payments go.

It will be recalled that Napocor had applied for a 17-centavo per kWh increase for its unbundled rate. But instead of granting the Napocor’s petition, the ERC ordered the state-owned power firm to reduce its rate by an average of seven centavos.

ERC’s order prompted Napocor to file for a temporary restraining order (TRO) with the Court of Appeal (CA), which it withdrew later on.

"The energy family (Department of Finance, Department of Energy, Power Sector Assets and Liabilities Management and Napocor) deem it proper to just talk it out with the ERC, that is why we decided to withdraw our CA petition. The ERC has agreed to review our figures," he said. Quilala did not say whether ERC has agreed to revise its decision on the unbundled rate petition of Napocor or just might consider the rate hike petition of the power firm to allow it to recover its huge losses.

He said th ERc told them that Napocor can file for an increase using a more recent 12-month base year. "We are looking at the possibility of using 2001 as base year," he added. "For now, the most important this is, we are able to unbundle the electricity rate of our customers for them to have a better understanding of the electricity bills that they are paying."