The Energy Regulatory Commission (ERC) has postponed its decision on several proposed rate hikes for the universal charge for missionary electrification (UCME), which funds off-grid power plants across the Philippines. The move comes after the National Power Corp. (NPC) submitted multiple applications seeking adjustments to the UCME rates, covering the years 2015 to 2022.
In a recent notice, the ERC explained that it deferred at least 14 applications due to unresolved issues, including questions about whether the NPC is entitled to a 12 percent recovery on operating revenue balances (RORB). If granted, this would be on top of the existing UCME charges, which are already paid by consumers as part of their electricity bills. ERC chair Monalisa Dimalanta clarified that the deferment was necessary to evaluate these concerns further, with the expectation of resolving them by the first quarter of 2025.
The UCME is a charge levied on all power consumers connected to the grid, intended to subsidize the operations of Small Power Utilities Group (SPUG) plants that serve remote, off-grid communities. SPUGs rely heavily on costly diesel fuel, which has fluctuated in price in recent years. The NPC, which operates 274 SPUG plants across 188 municipalities, typically requests UCME rate increases to cover rising operational costs.
However, the potential for an increase in UCME rates could have a significant impact on consumers. If the ERC approves the NPC’s request, consumers face higher electricity costs, particularly in areas where SPUG plants are the sole power source. The ERC is still weighing whether to approve NPC’s claim for a higher revenue recovery, which would add additional pressure on electricity bills.
Dimalanta said it is “premature” to predict the full impact of the proposed rate changes, as several key issues are still under review. The ERC is expected to provide more clarity in the next few months as it continues to evaluate the situation.
