Napocor to trim 2012 capex

MANILA, Philippines - State-run National Power Corp. (Napocor) may cut down on its capital expenditures next year if it fails to get its proposed P19-billion budget, a top company official said.

Napocor president Froilan Tampinco said if lawmakers would not approve the additional P4 billion the power company is asking, they may have no choice but to forego some of its capex.

“What we’re hoping is that the bicameral Congress committee would approve our motion for reconsideration of restoring another P4 billion. If not, we may have to defer some projects such as acquisitions of additional generation sets in certain areas. We will not be able to cover all areas,” he said.

Napocor spends about P1.1 billion monthly for operation such as repair of gensets and fuel procurement. On top of this, the company still needs funds to finance its debt service.

But Tampinco said they would be able to fund the P4 billion if they would be allowed by the Energy Regulatory Commission (ERC) to collect an additional seven centavos per kilowatt-hour (kwh) through the universal charge missionary electrification (UCME).

The National Government has prohibited Napocor from borrowing to raise more funds for its financing requirement.

To be able to cope up with its finances, the Department of Budget and Management (DBM) had released a portion of Napocor’s reimbursement for the maintenance of the Bataan Nuclear Power Plant. Napocor spends between P40 million to P50 million per year for the BNPP maintenance.

Under the Electric Power Industry Reform Act (EPIRA), Napocor will have to privatize its power plants. After the privatization of its power facilities, Napocor would be left with the function of operating the Small Power Utilities Group (SPUG) and those power plants that will not be sold by the Power Sector Assets and Liabilities Management Corp., an entity created under the EPIRA to dispose the Napocor assets.

EPIRA mandates that funds for the operations of SPUG shall come from the revenues from sales in the missionary areas and from the universal charge for missionary electrification as determined by ERC.

Napocor’s SPUG takes a leading role in the planning the power development in the missionary areas.

It assesses requirements and prospects for missionary electrification including the program for private sector participation. It also acts as the petitioner and local administration of the universal charge for missionary electrification.

Missionary electrification is funded from revenues of the sales to customers in the SPUG areas and universal charge collected from all electricity end-users as determined by the ERC.

The advances made by Napocor usually come from revenues from its main grid assets. However with the turnover of assets to winning private bidders and transferred to PSALM prior to privatization, Napocor’s capability to provide advances for missionary electrification is significantly diminished.

The SPUG operates 304 generating units with a total generated capacity of about 129 megawatts.

Its operation includes a hydroelectric plant and a hybrid wind turbine farm. It also serves 78 island grid and eight isolated grids, providing electricity to 42 customers consisting of 39 electric cooperatives and three local government units.