Napocor seeks P1.65-B cost recovery in missionary areas

MANILA, Philippines – The National Power Corp. (Napocor) is seeking to recover around P1.65 billion in fuel costs incurred in the delivery of power in off-grid areas during the second half of 2014.

In a filing with the Energy Regulatory Commission (ERC), the state-run firm is asking the power regulator to grant its application for its 14th generation rate adjustment mechanism (GRAM).

Napocor performs its missionary electrification function through the Small Power Utilities Group (SPUG), which incurs additional operating costs as a result of the fluctuation of fuel prices used in power generation.

GRAM seeks to recover deferred fuel costs incurred in providing power in missionary areas, which is allowed under Republic Act (RA) 9136 or the Electric Power Industry Reform Act (EPIRA) of 2001.

Napocor has proposed a GRAM deferred accounting adjustment (DAA) amounting to P1.65 billion, covering the period July to December 2014, recoverable for a period of two years.

This would translate to proposed charges of P1.5594 per kilowatt-hour in Luzon, P2.017 per kWh for those in the Visayas and P1.2921 per kwh for those in Mindanao.

These will be charged directly to customers in Napocor-SPUG areas.

Napocor said the GRAM proposal is aimed “to mitigate the impact to customers in the missionary areas.”

 “The proposed 14th GRAM DAA is fair and reasonable as it is computed in line with the GRAM rules and consistent with the principles of free and competitive electricity market as provided under RA 9136,” Napocor said.