Energy officials look to the local debt market for relief and find a P5 billion credit line quickly to underwrite the financing requirements of the Small Power Utilities Group (SPUG) operated by the National Power Corporation (NPC).
The proposed credit line is backed by a sovereign guarantee and one of options considered by energy officials to enable the SPUG to continue to deliver its services to off-grid power consumers.
Unless relief is found, officials said the SPUG will run out of subsidized fuel by August this year under a feared no-subsidy scenario.
But even then, the Energy Regulatory Commission (ERC) on Thursday vowed to resolve the request by the NPC to increase the rate it charges power consumers under the universal cost for missionary electrification or UCME.
The UCME collection underwrites the fuel cost of 278 SPUG plants across the country whose subsidized operations are seen disrupted in the months ahead unless the rate is allowed to adjust.
Such an adjustment is estimated raise the UCME rate charged by the NPC by an additional P0.15 per kilowatt-hour.
“We promised NPC to help them resolve their cases that are actually ten years old piling up at the commission. There are eight cases filed over the last yen years, we try to resolve two cases every quarter starting this March until we get to the 15 centavos to help (NPC) have funds to buy fuel,” ERC chairperson Monalisa Dimalanta said at the sidelines of the Pandesal Forum in Quezon City.
Dimalanta said if the first two UCME rate increase petitions are resolved within the month, its impact on SPUG power rates will only be felt in May this year.
In January this year, the NPC estimated its fuel requirement at P11.48 billion on the basis of 150,555 kiloliter of fuel costing P76.28 per liter.
However, NPC’s available fuel budget is only P7.53 billion or sufficient for the purchase of only 100,608 kiloliters of fuel costing P74.35 per liter. At these numbers, the budget runs out by end-August if no other measures are taken.
Apart from the UCME increase, NPC is banking on the expected issuance of the President for a sovereign guarantee for a proposed P5 billion credit line as well as additional subsidies from the national government and the possibility of an upward adjustment in the rates of electric cooperatives in missionary areas that are deemed “more capable of paying.”
