Napocor seeks higher rates for missionary service areas

MANILA, Philippines - State-owned National Power Corp. (Napocor) will file a petition to energy sector regulators for higher rates of the Universal Charge for Missionary Electrification (UCME).

This application for higher rates is part of the recovery schemes allowed under the Electric Power Industry Reform Act (EPIRA) and will bankroll electrification efforts in far-flung areas.

Napocor president Froilan A. Tampinco said in a briefing that the company will secure the approval of the Energy Regulatory Commission (ERC) for the UCME of P0.06 per kilowatt hour (kwh). This will be added to existing the true-up of P0.0709 per kwh.

To date, Napocor collects P0.0454 per kwh, on top of the P0.0709 per kwh true-up, under the UCME for 2009-2013.

Tampinco said the existing UCME will end in July. Earlier, the ERC reduced UCME level to P0.0454 per kwh from P0.0978 per kwh.

“When Napocor files for the new UCME, which is dependent on the Missionary Electrification Development Plan approval from the Department of Energy, the P0.0454 [per kwh] UCME will be removed,” Tampinco said.

Under the EPIRA of 2001, UCME collections from end-users will be used for the electrification of remote communities or areas not connected to the main transmission grid in Luzon, Visayas and Mindanao.

Tampinco said that if approved by the ERC, the P0.06 per kwh will result in P4 billion of fresh funds for Napocor’s projects.

There are 14 areas under Napocor’s Small Power Utilities Group (SPUG) that operate in off-grid areas. These include parts of Catanduanes, Romblon Siquijor, Sulu, Tawi-Tawi, Basilan and Palawan.

“Napocor wants to make missionary areas attractive to investors,” Tampinco said.

The required UCME is the cost differential between the sales revenues and operating expense and capital expense for expansion, rehabilitation and facilities for new areas of development.

Last week, Napocor announced its major thrusts composed of operations of unprivatized assets, missionary electrification, workforce development and environmental protection.

Under the EPIRA, Napocor will have to privatize its power plants. After the privatization of its power facilities, Napocor would be left with the function of operating the SPUG and those power plants that will not be sold by state-run Power Sector Assets and Liabilities Management Corp.