Power users get longer billing period for 7¢/kwh rate hike

MANILA, Philippines – Grid-connected power consumers will be billed for a longer period the P0.07 per kilowatt-hour (kwh) rate hike approved last year, the power sector regulator said.

While the Energy Regulatory Commission (ERC) exempted consumers in far-flung or off-grid areas from paying additional rates, customers connected to the grid will have to pay for the added rates that should have been collected to consumers in far-flung areas.

In August last year, the ERC issued a decision allowing the National Power Corp.-Small Power Utilities Group (SPUG) to collect P4.146 billion each from off-grid and grid-connected consumers.

This translates to an additional P0.07 per kwh for both grid and off-grid consumers as (SPUG) recovers fuel and foreign currency exchange costs.

“The Napocor-SPUG is hereby authorized to collect the remaining balance of the approved generation rate adjustment mechanism (GRAM) and incremental currency exchange rate adjustment (ICERA) from the universal charge-missionary electrification (UCME) effective August 2012 billing period,” the ERC said.

The ERC said this will lessen the impact on rates in SPUG areas. SPUG is mandated by the Electric Power Industry Reform Act of 2001 to undertake the electrification of remote villages or areas not connected to the main transmission grid in Luzon, Visayas and Mindanao.

In a phone interview, ERC executive director Francis Saturnino C. Juan said this will not lead an increase in the P0.07 per kwh UCME.

But the payment of such rates will be longer than expected, Juan said, without specifying the new timeline.

“Instead of collecting that from the SPUG customers, Napocor will collect it all through the UCME,” Juan said.

The balances from the P4.146 billion collection target will be collected from the grid-connected consumers, Juan said.

The ERC said the collection of incurred costs will allow the SPUG to continue its operations by addressing its expenses and maturing obligations.

To date, there are 14 areas under SPUG including Catanduanes, Romblon, Siquijor, Sulu, Tawi-Tawi and Basilan that are under review prior to privatization.

The GRAM covers the difference between the allowable fuel and purchased power costs and the amounts recovered through the approved basic generated rate during the test period and the balance of previously-approved GRAM applications of Napocor and subsidiary Power Sector Assets and Liabilities Management Corp. (PSALM).

The ICERA, on the other hand, corresponds to the additional costs or savings from foreign exchange fluctuations in the settlement of debt service and operating expenses.