Napocor cuts power rates

The National Power Corp. (Napocor) has been allowed to cut rates to reflect a stronger peso and lower power purchase cost.

The Energy Regulatory Commission (ERC) said Napocor was allowed to reduce its rates by a total of eight centavos per kilowatt-hour (kWh) starting this month.

The provisionally approved rates apply to the Feb. 26 to March 25, 2007 billing period.

"Current effective rates will be reduced by P0.0430 for Luzon, P0.3151 for Visayas and P0.0045 for Mindanao for the first month of implementation," ERC Chairman Rodolfo Albano said.

"The reductions were arrived at after a careful and thorough evaluation of Napocor’s petitions," Albano said.

"The public has been expecting a reduction in rates as the Philippine currency exchange rate gets better. However, the directive does not reflect yet said improvement for it covers earlier billing periods," Albano said.

According to Albano, the impact of the peso appreciation should reflect in the power rates.

Napocor earlier petitioned for rate adjustments on its incremental fuel and Independent Power Producer (IPP) costs and the foreign currency exchange rate fluctuations under the Incremental Currency Exchange Rate Adjustment (ICERA).

Deferred fuel and IPP costs refer to the increase or decrease in the fuel and purchase power costs portion of the approved generation charges for Luzon, Visayas, and Mindanao grids.

On the other hand, deferred foreign exchange fluctuation costs are the changes in currency exchange. ICERA is the cost recovery adjustment mechanism for foreign exchange changes which should have no impact on the utility’s income. Both the deferred fuel and forex adjustments are allowed pass-through charges.

Under the present rules, power generators and distributors are allowed to recover adjustments in their Generation Rate Adjustment Mechanism and Incremental Currency Exchange Rate Adjustment every three months upon approval of the ERC.