Supplying the so-called off-grid areas with electricity is proving problematic for the National Power Corporation (NPC) as it bared a budget shortfall P3.95 billion wide on Monday.
According to the NPC, its budget allows for the purchase of electricity no more than P7.53 billion this year but is faced with the knowledge that the off grid areas require servicing the various power producers at least P11.48 billion.
Apart from the budgetary shortfall, the NPC also requires a sovereign guarantee from the national government to obtain a P5 billion credit line that will assure continued supply on those same off-grid areas of the country, a line that has not been granted thus far by the Department of Finance at this point.
The NPC said that its budget allows for the purchase of P7.53 billion worth of electricity for off-grid consumers, just enough to buy 100,608 kiloliter of fuel at an average of P74.35 per liter.
The catch is the fuel for off grid areas will run out by end-August this year “if no other measures are taken,” the NPC said.
It earlier estimated requiring at least P11.48 billion this year to buy 150,555 kiloliters of fuel at the projected rate of P76.28 per liter.
The NPC said that because of higher fuel prices and without the guarantee of additional funds, it will be forced to further limit the running time of its power plants in off-grid areas just to have fuel last until the end of the year.
“The idea presented is to effectively ration available fuel throughout the entire year. We had initially announced the rationing to start as early as February but we have not finished the consultations so we decided to defer it for consideration by March,” said Fernando Martin Roxas, NPC president, said.
According to him, the fuel will be rationed fairly among the different electric cooperatives that will be affected.
“The big issue is the deficit. There is fuel but the funds are the problem… I hope that we can work together to manage a rationing, it will be better for everybody. But of course NPC will do its best to gather additional funding but at some point we need to be prepared to actually bear some of the costs,” Roxas sai.
NPC operates Small Power Utilities Group (SPUG) plants nationwide located in islands and communities that are not connected to the main transmission grid.
It said that under the rationing plan, 84 SPUG plants that currently run 24×7 will be forced to operate only 15 hours a day.
As for the other 72 SPUG plants that operate 16 hours or lower, those that currently supply 16 hours will be reduced to 12 hours while those that generate below 16 hours at present will have to operate only 5 hours per day.
The operations of SPUG power plants are partly funded by revenues from power sales and from the universal cost for missionary electrification or UCME charge collected from customers connected to the main power grid.
Apart from the P5 billion sovereign guarantee, other measures being considered to beef up NPC’s budget include the Energy Regulatory Commission’s approval of an increased UCME charge, additional subsidies from the national government, and an upward adjustment in the rates of electric cooperatives in missionary areas deemed more capable of paying.
