Napocor defends move to lease generators

The National Power Corp. (Napocor) believed that it made the right decision in leasing generator sets as a stop gap measure to address growing demand for power in some areas of the country.

Napocor said renting diesel generator sets for the provinces of Oriental Mindoro, Palawan and Panay was necessary to address the growing electricity demand in the said areas.

"Napocor is simply complying with its mandate to provide reliable electricity supply to all parts of the country, including the remotest and most far-flung communities," Napocor president Rogelio M. Murga said.

"At the same time, we have to look at the bigger picture – the demand for electricity in the said provinces is rapidly growing and failure to address that growing demand will mean lost business opportunities," Murga said.

Murga was reacting to recent criticisms by the Foundation for National Development that the rental of the modular diesel gensets was a "desperate and costly" measure and was indicative of poor planning and lack of foresight on the government’s part.

He said contrary to FND’s claims of a power crisis, there is an excess supply of power in Luzon and in most parts of Mindanao.

"It is only in the Visayas, Southeastern Mindanao, and in some small islands where supply is tight. At any rate, we have to address the situation fast, because the availability of adequate and dependable electricity is especially critical during the summer months, when demand historically goes up," he said.

On FND’s allegations that the electricity that will be generated by the gensets is more expensive than that produced by Napocor, Murga clarified that the cost of renting the generators translates to about P1.44 per kilowatt-hour to P1.54 per kWh only. If one factors in the cost of fuel to run the generator sets, the production cost would range from P5.10 per kWh to P6.06 per kWh.

These figures however are almost identical to Napocor’s own cost in generating power for its missionary electrification functions in the remote areas serviced by its Small Power Utilities Group (SPUG).

Based on official data, SPUG’s production costs amount to about P6.10 per kWh in the Small Island Grid, which includes Palawan and Mindoro. Napocor however sells electricity to the SPUG areas at subsidized rates ranging from P3.71 per kWh to P5.69 per kWh.

In the main grids, Napocor’s tariffs, as approved by the Energy Regulatory Commission, are P2.39 per kWh in Luzon; P2.84 per kWh in the Visayas; and P1.32 per kWh in Mindanao.