National Power Corporation seeks recovery of P1.6 billion from off-grid operations in 2016

MANILA, Philippines — The National Power Corp. (Napocor) wants to recover nearly P1.6 billion from customers in missionary areas for the operational costs incurred in the delivery of power to off-grid areas in 2016.

Napocor filed a petition with the Energy Regulatory Commission (ERC) to approve its 17th application of recovery charges under generation rate adjustment mechanism (GRAM).

GRAM seeks to recover deferred fuel costs and power purchased costs incurred in providing power in Napocor-Small Power Utilities Group (SPUG) areas.

In its GRAM application, Napocor is seeking to recover P1.58 billion of deferred fuel costs it incurred from January to December 2016.

To recover this amount, it proposed to impose additional charges of P1.0343 per kilowatt-hour (kwh) for off-grid customers in Luzon, P0.8009 per kwh for those in Visayas and P0.9862 per kwh for those in Mindanao for two years.

“The proposed deferred accounting adjustment will reflect the recent costs authorized under the GRAM rules/mechanism and Napocor would increase the revenue commensurate with its cost and ultimately reduce the burden of the UCME on all electricity end-users,” Napocor said.

The UCME, or the universal charge for missionary electrification, is collected from end-users which will be used for the electrification of remote communities or areas not connected to the main transmission grid.

Under the Electric Power Industry Reform Act (EPIRA) of 2001, Napocor is mandated to provide power generation and its associated power delivery systems in areas that are not connected to the transmission system, which include remote villages in Mindanao, Palawan and Mindoro.

This is being done through Napocor-SPUG, which incurs additional operating costs as a result of the fluctuation of fuel prices used in power generation. It currently has 275 SPUG plants. 

This year, the state-run firm is acquiring 124 generator sets (gensets) worth as much as P1.3 billion to improve power supply in off-grid islands.