Napocor’s long-term debts soar 23% to P461B as of Dec 2003

The National Power Corp.’s (Napocor) long-term debts ballooned to P461 billion as of end-December 2003 from P376 billion in the same period last year.

Based on the company’s unaudited financial statement, the long-term liabilities of the power firm rose by 23 percent or P85 billion.

The same data showed that the lease obligation of Napocor on its build-operate-transfer (BOT) contracts went up by 20 percent or P180 billion to P716 billion from P595 billion in end-2002.

For capacity fees on BOT alone, the firm paid P38 billion in 2003 from P32 billion in 2002.

Bond payments during the period increased to P5.4 billion form only P40 million in the comparative period in 2002.

In the same period under review, the state-run power generation company paid some P25 billion in interest expense as against P18 billion level in 2002.

Napocor has incurred P117 billion net loss in 2003 compared to P34 billion loss a year ago.

Last year, the company’s borrowings dropped to P3.7 billon from P4.7 billion the previous year. Its bond flotation likewise decreased to P64.3 billion from P70 billion in 2002.

Napocor president Rogelio Murga, in an interview, said they expect to cut their expected losses this year if the Energy Regulatory Commission (ERC) will allow the firm to raise its generation rates.

"If we will be able to collect more revenues from the new generation rates, we will cut our losses starting October this year," he said.

Murga said they expect to break even from the huge losses by next year. It expects to incur P113 billion losses this year.

The state utility has sought the ERC’s approval to raise rates by 82 percent to recover additional cost it incurred due to higher fuel prices.

Napocor is proposing for its generation charges to be raised by an average P1.85 per kilowatt-hour to P4.09/kw across the country.

The firm charges different rates for the three-island groupings Luzon, Visayas, and Mindanao. Under the utility’s proposal, the generation rate will increase to P4.56 a kilowatt-hour for Luzon, P P4.59 for Visayas, and P3.13 for Mindanao.

Murga said the increase would ensure the continuous operation and its viability to new investors in the light of its ongoing 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 requirements of creditors before it could get loans.

Murga said 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.