Napocor seeks recovery of off-grid costs

MANILA, Philippines - The National Power Corp. (Napocor) is seeking to recover generation and foreign exchange costs incurred as a result of its mandate of providing electricity to consumers not connected to the main grid.

The proposed recoveries, if approved, would result in higher electricity rates for the state-run power generation firm’s  consumers in the far-flung areas. 

Napocor has filed separate petitions before the Energy Regulatory Commission (ERC) for the recoveries. 

These are the 12th application for the recovery of the incremental costs on foreign exchange fluctuations under the so-called incremental currency exchange rate adjustment (ICERA) and the deferred accounting adjustments known as the generation rate adjustment mechanism (GRAM).

ICERA seeks to recover costs on foreign exchange rate fluctuations while GRAM seeks to recover deferred fuel costs incurred in providing power in missionary areas.  

In its ICERA petition, Napocor is seeking to recover P8.996 million spread over 12 months for an additional monthly charge of P0.0194 per kilowatt-hour to be charged to end-consumers in Napocor-Small Power Utilities Group (SPUG) areas.

“This application seeks the Honorable Commission’s approval for the recovery of total deferred forex costs for the billing period July 2013 to December 2013,” Napocor said.

For GRAM, Napocor is seeking to recover P1.652 billion incurred from July to December 2013 and to be recovered in two years. This would translate to additional charges of P1.8279 per kilowatt-hour for off-grid customers in Luzon, P2.1585 per kwh for those in Mindanao and P1.4654 per kwh for those in the Visayas.

“Since these expenses were already incurred in the year 2013, immediate recovery of the needed adjustment through a provisional authority would help alleviate the operational funding of applicant, without prejudice on the authority of the Honorable Commission to approve the recovery of this adjustment as part of the true cost generation rate,” Napocor said in its petition.

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