Napocor sees need for additional capacity in Visayas

The National Power Corp. (Napocor) sees a need to install additional capacity in the Visayas region soon as the growth rate in the area in the first quarter of 2006 was twice as high as the projected 5.5 percent growth in the country’s gross domestic product (GDP).

Napocor data showed that Visayas registered the highest growth in the energy sales at 11.76 percent from 1,033.26 gigawatthours (GWh) in the first quarter of 2005 to 1,158.05 million gwh in the same period in 2006.

"This is a clear indication that Visayas’ economy is improving, and that the demand for power will continually increase, necessitating the installation of additional power generating facilities," Napocor said.

According to Napocor, the main drivers of Visayas’ power demand are the industrial and commercial activities in the region.

Among the bulk power users in the Visayas are the Visayan Electric Co., Inc., Mactan Electric Co.; Philippine Phosphate Fertilizer Corp., the Central Negros Electric Cooperative, and Iloilo I Electric Cooperative Inc.

The double-digit growth in the Visayas also pushed Napocor’s overall first quarter revenues up to P36.48 billion in January to March 2006, or 25.26 percent more than the P29.13 billion it earned in the same period last year.

The Luzon grid accounted for the big chunk of the power firm’s three-month revenues at P28.17 billion, up 25.89 percent from the year-ago level of P22.38 billion. Visayas and Mindanao contributed P3.83 billion and P4.48 billion, respectively, up from last year’s P3.16 billion and P3.59 billion.

Napocor attributed the higher revenues to a 6.33 percent growth in sales volume, and to the Energy Regulatory Commission’s approval last April 13, 2005 of a power rate adjustment based on the power firm’s return-on-rate-base with time-of-use (RORB-TOU) application. In terms of volume, energy sales rose by 516.22 gwh, or from 8,156.36 in the first quarter of 2005 to 8,672.57 gwh this year. A gigawatthour is equivalent to one million kilowatthours.

According to the report, the higher sales volume can be traced to a 7.04 percent improvement in Napocor’s sales in the Luzon grid, which accounts for close to 70 percent of the power firm’s total market. Specifically, sales in the region went up from 5,491.61 gwh to 5,878.17 gwh year-on-year, due in turn to a 9.24 percent increase in Napocor’s sales to its single-biggest customer, the Manila Electric Co. (Meralco).

Sales to Meralco for the period under review stood at 3,435.75 gwh, up from 3,145.04 gwh in 2005. Apart from Meralco, other Luzon-based utilities like the Batangas II Electric Cooperative Inc., Angeles Electric Corp., and the Camarines Sur II Electric Cooperative, contributed to the higher sales in the grid. Industrial estates like Philippine Economic Zone Authority in Baguio City and the TIPCO Estates Corp. also beefed up over-all sales in the region.

Sales in the Mindanao grid grew by 0.48 percent year-on-year, or from 1,636.34 gwh in January to March 2005, to 1,628.53 gwh this year. The top customers of Napocor in Mindanao during the period were Treasure Steelworks Corp., Global Steel Manufacturing Corp., Philippine Sinter Corp., Iligan Light & Power Co., Inc., and South Cotabato Electric Cooperative II.