Napocor customers enjoyed P1/kWh cut in electric bills last year

Customers of the National Power Corp. (Napocor) in Luzon and Minda-nao enjoyed a P1.3085 per kilowatthour reduction in their power bills in 2008.

Napocor said the reduction was a result of a series of rate cuts implemented by state-run power firm last year.

Specifically, Napocor said it had reduced its effective rates by a total of P1.3085 per kilowatthour (kWh), or from P4.4971 per kWh in January to P3.1886 per kWh by December in the Luzon grid. 

Last year, Napocor implemented six rate reductions in the Luzon grid – three were applied to the Generation Rate Adjustment Mechanism (GRAM), and the other three to the Incremental Currency Exchange Rate Adjustment (ICERA). 

Under the 8th, 9th, 10th and 11th GRAM, Napocor lowered its rates by 3.15 centavos per kWh, 56.11 centavos per kWh, and 23.58 centavos per kWh, respectively. 

The 8th GRAM reduction was in place from January to May 2008, while the 9th GRAM was implemented from June to November. The Implementation of the 10th and 11th GRAM started in December last year.

Meanwhile, the rate reductions in Luzon under the ICERA amounted to 24.27 centavos per kWh (7th ICERA, from February to March 2008) and 18.20 centavos per kWh (8th ICERA, from June to November). 

A third round of ICERA reductions, amounting to 32.42 centavos per kWh, took effect starting December 2008.

On a month-to-month basis, the biggest rate reduction in Luzon – amounting to 71.16 centavos per kWh – was felt by Napocor customers in June, when rates went down to P3.3567 per kWh from P4.0683 per kWh in May. 

Napocor’s generation charges also automatically go down from P4.0753 per kilowatt-hour during the first half of the year (January to June) to P3.7241 per kWh from July to December under Napocor’s Time-Of-Use rate schedule. 

According to Napocor, it was able to reduce its rates during the second half of 2008, when the onset of the rainy season allows it to optimize the use of its hydroelectric power plants.

Running hydro power is considerably cheaper to operate than geothermal or coal-fired power plants.

In Mindanao, Napocor was able to bring down its effective rate by 30.04 centavos per kWh in 2008, or from P2.6941 per kWh in January to P2.3937 per kWh as of December. 

But Napocor said its effective rate in the Visayas grid went up last year, from P2.8343 per kWh in January to P2.9934 per kWh in December, or by 15.91 centavos per kWh.        

Napocor attributed the series of downward rate adjustments in Luzon and in Mindanao last year to the generally favorable conditions prevailing in 2007, including its solid financial performance, a strong foreign exchange rate, and generally stable fuel pricesLuzon accounts for close to 70 percent of Napocor’s total market, with energy sales of almost 25,000 gigawatt-hours. 

In terms of customers, 138 of Napocor’s 263 customers are located in the said grid.