Napocor-SPUG wants to raise power rates in provinces

(Updated 10:44 p.m.) State-owned National Power Corp. (Napocor) and its department known as the Small Power Utilities Group (SPUG) wants permission from the Energy Regulatory Commission (ERC) to raise it power generation costs in rural areas as a way of recovering its production and foreign exchange costs. In separate applications filed with the commission on Jan. 14, which the ERC released Monday, Napocor-SPUG said it wants to recover over P2.129 billion the State power firm used to buy fuel and power as well as the foreign exchange component of its missionary electrification program. Napocor-SPUG is invoking its right to increase its power rates in 31 provinces for 24 months under the generation rate adjustment mechanism, also known as the rate recovery scheme approved by the commission. Prayer to increase power rates "The applicant prays that the proposed deferred accounting adjustment for the test period January 2009 to December 2009 in the amount of P2.139 billion be approved or provisionally approved," according the petition to increase power rates. In performing its missionary electrification function, Napocor-SPUG said it incurs additional fuel operating costs as a result of fuel price movements and in the cost of power that it buys from its suppliers. "The additional fuel and purchased power costs, which Napocor-SPUG bears, if allowed to escalate without the benefit of any recovery through rates, will contribute to its deteriorating financial condition," it said. In another petition, Napocor-SPUG said it wants to recover the costs it incurred on the changes in the peso-dollar foreign exchange rate, totaling P153.97 million, noting it either incurs additional operating costs or gains savings in servicing its foreign debt and its expenses in foreign currency. The state power utility cited insurance coverage of imported power plant and transmission parts in arguing its foreign currency expenses. "Applicant proposes to recover (refund) the deferred accounting adjustments corresponding to additional costs or savings from foreign exchange fluctuations in the settlement of debt service and operating expenses as well as corresponding carrying charges for the billing period January to December 2009 for Luzon, Visayas and Mindanao grids," it said. Foreign exchange expenses Thus, Napocor-Spug wants an increase of P0.1982 per kilowatt hour in various provinces nationwide to recover P153.97 million over 12 months. SPUG, the missionary electrification arm of Napocor, is mandated by the Electric Power Industry Reform Act to provide remote islands and far-flung, inland barangays with electricity, in particular those that are not connected to any of the main power grids. Napocor’s generating assets are already more than 90 percent privatized giving the company more time to focus on SPUG’s operations. Napocor-SPUG currently operates 112 power plants nationwide with a combined rated capacity of nearly 200 megawatts. — VS, GMANews.TV