Napocor seeks automatic rate adjustments

MANILA, Philippines - State-run National Power Corp. (Napocor) applying for an automatic tariff rate adjustment mechanism before the Energy Regulatory Commission (ERC), to sustain its financial viability, its top official said.

The application for automatic tariff and universal charges for missionary electrification (UCME) adjustment mechanism is part of the power firm’s plans and projects to improve the delivery of electricity in so-called missionary areas, said Napocor president Ma. Glady Cruz-Sta. Rita. Sta. Rita said another of their project involves a massive re-fleeting and retirement program to replace oil and high-fuel consuming and unreliable diesel generator sets in the different missionary areas.

UCME refers to the cost of service not covered by the subsidized approved generation rate. It is approved by the ERC and is collected from all end-users subsidizing the cost of electricity service in the island grid.

Napocor’s UCME is at a prevailing rate of P0.0709 per kilowatt-hour. It intended to raise its UCME to P0.2262 per kwh by 2013 and P0.3179 per kwh for 2014.

These missionary areas are scattered all over the country. They are far-flung villages and remote barangays that are not connected to the main power grid.

Sta. Rita said a Napocor study showed that the break-even for recovery of capital cost vis-a-vis fuel savings ranges from 12 to 20 months.

As such, Napocor would be pursuing procurement of new diesel generator sets to replace the rented ones and supplement the needed capacity of the first 14 large SPUG (Small Power Utility Group) areas where there is a projected power supply deficiency brought by difficulties in attracting private sector or the new power providers (NPPs).

Napocor will also be developing a renewable energy (RE) program for off-grids and push the adoption of appropriate RE technologies in missionary areas.

“Initial implementation of solar hybrids in areas requiring increased operating hours or those where fuel is difficult and expensive to deliver,” Sta. Rita said.

Furthermore, Napocor said it would also establish a reasonable graduation program for mission areas from the UCME subsidy in coordination with the Department of Energy and the National Electrification Administration (NEA).

Sta. Rita said Napocor would also phase out Napocor’s generation function in private areas that are fully taken over by NPPs and transfer deployment of existing diesel generating units to other areas.

Another project is the accelerated implementation of needed transmission line and substation expansions that are designed to reduce system loss and UCME requirements.

Toward this end, Napocor would implement redeployment and termination of manpower and resources from areas fully taken over by NPPs.

The company is on track to meeting its P1-billion profit target this year, Sta. Rita earlier said.

In 2011, the company posted a net loss of P18.87 million, significantly narrower than the P2.78 billion net loss incurred in 2010.