Napocor seeks higher electricity rate

By Neil Jerome Morales, The Philippine Star

Posted at Oct 06 2012 10:16 AM | Updated as of Oct 07 2012 05:51 AM

MANILA, Philippines - More than P1.50 per kilowatt-hour (kwh) increase in electricity rates is forthcoming as the National Power Corp. (Napocor) seeks to recover fuel and foreign currency exchange costs nationwide.

In a public notice, the Energy Regulatory Commission (ERC) said Napocor is seeking a rate hike through the generation rate adjustment mechanism (GRAM) and incremental currency exchange rate adjustment (ICERA).

Napocor said it is applying for “the recovery of proposed deferred accounting adjustments covering the test period January 2011 to June 2011 for the deferred fuel costs in the amount of P1.891 billion recoverable for a period of two years.”

In its petition, Napocor wants to collect P1.6787 per kwh from consumers in Luzon, P1.4194 per kwh for Visayas and P1.6424 per kwh for Mindanao, for an average rate increase of P1.6424 per kwh.

Napocor targets recovering P1.6787 billion in fuel costs from Luzon consumers, P1.4194 billion from Visayas and P1.5998 billion from Mindanao. Higher rates will be in effect for two years.

Napocor has also applied for an additional charge of P0.0170 per kwh to collect P9.08 million from consumers in far-flung areas.

The GRAM covers the difference between the allowable fuel and purchased power costs and the amounts recovered through the approved basic generated rate during the test period and the balance of previously-approved GRAM applications of Napocor and subsidiary Power Sector Assets and Liabilities Management Corp.

The ICERA, on the other hand, corresponds to the additional costs or savings from foreign exchange fluctuations in the settlement of debt service and operating expenses.

Napocor said the collection of incurred costs would allow the Napocor-Small Power Utilities Group (SPUG) to continue operations by addressing its expenses and maturing obligations.

Napocor’s SPUG is mandated under the Electric Power Industry Reform Act of 2001 to provide electricity to remote barangays and villages or areas not connected to the main transmission grid.