The National Power Corp. (NPC), which recovers only around a third of costs incurred in supporting the Small Power Utilities Group, is optimistic the Energy Regulatory Commission (ERC) will act quickly on its petition to raise the power rates charged by the various SPUGs.
Prompt action will allow the state-run firm to raise enough revenue to continue the procurement of fuel for isolated island and small community power plants far removed from the main electrical grid.
Fernando Martin Roxas, NPC president and chief executive officer, told reporters the petition for a rate increase faces resistance.
According to Roxas, SPUG rates are based on NPC diesel procurement of P36 per liter that it now buys at over P68 per liter. This is on top of an additional P6 to P7 in hauling fee to move the fuel from depot to the islands.
“We recover less than 1/3 of our cost and lose a lot of money,” Roxas said.
Roxas said the NPC recently secured a loan for P15 billion to procure diesel but acknowledged that without a rate increase, the borrowed money will not be enough to sustainably purchase fuel.
He said an 8-centavo per kilowatthour increase in SPUG rates translates to P8 billion the NPC needs to buy fuel for next year.
The SPUGs charge a rate based on 2014 fuel data. The NPC, Roxas said, has filed rate increase petitions the past 10 years since.
The ERC in January this year heared the rate increase petition filed by the NPC to be borne by consumers in off-grid areas in the country. More will be heard until October this year potentially benefiting SPUGs in Mindoro, Marinduque, Palawan, Catanduanes, Masbate, Romblon, Tablas, Camotes, Siquijor, Bantayan, Basilan, Sulu and Tawi-Tawi, among others.
ERC chairperson Monalisa Dimalanta acknowledged the rate charged against off-grid consumers remain frozen at 2005 rates.
Energy authorities make up for the deficiency by collecting from on-grid consumers in the form of the Universal Charge for Missionary Electrification (UCME) beginning in 2011.
The UCME currently at P0.2233 per kilowatt hour subsidizes the operations of SPUG plants.
The NPC supervises 278 SPUG power plants nationwide.
