ERC to conduct hearings on Napocor rate hike petition

The Energy Regulatory Commission (ERC) will conduct a series of public hearings from July 26 to 29 on the rate hike petition of the cash-strapped National Power Corp. (Napocor).

The state-owned power utility has sought the ERC’s approval to raise rates by 82 percent, which it said was needed to recover additional costs incurred due to higher fuel prices.

According to Napocor officials, the company may even hold local roadshows and information campaign in Luzon ahead of the ERC’s public hearings to be able to explain to the electricity consumers the rationale in raising power rates.

Napocor has proposed to raise its generation charges by an average of P1.85 per kilowatthour (kwh) to reach P4.09/kwh across the country.

The power firm charges different rates for the three island groupings of Luzon, Visayas, and Mindanao.

Under Napocor’s proposal, the generation rate will increase to P4.56/kwh in Luzon, P4.59/kwh in the Visayas, and P3.13/kwh in Mindanao.

Napocor president Rogelio Murga said the increase would ensure the firm’s continuous operation and its viability to investors as it prepares for its eventual privatization.

He said this will allow the company to meet a return-on-rate base (RORB) level of eight percent which is one of the creditors requirements before securing loans.

Murga added that the petition also includes time-of-use rates, which will encourage consumers to use electricity during off-peak hours when electricity rates are at their lowest.

Under the law, Napocor and other power producing companies are allowed to file for the recovery of fuel costs and foreign exchange fluctuation every quarter.

The ERC allowed Napocor earlier this month to raise rates by around six percent to recover costs incurred in the fourth quarter of 2003.

This came on the heels of a 4.2 percent increase in the generation portion of the rates charged by power distributor Manila Electric Co. (Meralco), Napocor’s biggest client.