ERC rushes review of petition to solve UCME woes

MANILA, Philippines — The Energy Regulatory Commission (ERC) is rushing to review petitions of the National Power Corp. (Napocor) to solve the present crisis in missionary areas of the country.

In an advisory, the ERC said it received various requests from several new power providers and qualified third parties informing the commission of the circumstances surrounding the delay of Napocor in the payment of universal charge for missionary electrification (UCME) subsidy billing.

“Please be advised that the commission is already in the process of evaluating all pending petitions of the National Power Corp. for the approval of its availment from the UCME and all other similar applications involving the UCME,” the ERC said.

Napocor explained that the continuous increase in the average price of diesel has led to the depletion of the allotted funds for fuel.

Thus, Napocor has taken measures to bridge the funding gap through the implementation of corporate-wide austerity measures, and by looking into possible borrowing or additional subsidies from the national government, the ERC said.

As the regulatory body tasked with the duty of protecting and promoting consumer interest, the ERC faces the challenge of balancing the interests of consumers and end-users in missionary areas on one hand, and on-grid end-users who shoulder the burden of subsidizing the UCME, on the other.

“Rest assured that the commission shall expedite the review of Napocor’s relevant petitions following due process and proceedings, in addition to looking for alternative solutions to solve the present crisis in missionary areas, while ensuring that reasonable prices and quality service will be provided,” the ERC said.

The UCME is one of Napocor’s sources of funds under the law, apart from energy sales collected from electric cooperatives.

Under the Electric Power Industry Reform Act (EPIRA) of 2001, UCME is collected from end-users, which will be used for the electrification of remote communities or areas not connected to the main transmission grid.

Napocor is the implementing agency for missionary electrification through its unit Small Power Utilities Group (SPUG).

Napocor SPUG supplies 229 missionary areas throughout the country, most of which have yet to attain a 24-hour electric power service.

It operates more than 270 SPUG plants, majority of which are in Luzon.

With the government’s push for clean and sustainable energy, Napocor is also looking to ramp up the use of renewable energy in its service areas in partnership with the private sector.

At the onset of 2022, Napocor said the average price of diesel has only been at P47.4303 per liter.

This has gradually increased over a four-month period to as high as P80.0053, consequently exhausting its allotted funds for fuel.

In August last year, Napocor said it was again confronted with the challenge of providing ample fuel supply to its service areas when its fuel supplier decided to halt fuel delivery until payments for recent deliveries are made.

“Napocor continues to find ways to bridge this gap in funding through any of its projected sources – approval of ERC petitions, borrowings, or additional subsidy from the national government,” it said.