NAPOCOR seeks power rate hike
NAPOCOR seeks power rate hike
The state-run power firm has filed an application with the Energy Regulatory Commission, requesting a rate increase for recovery cost adjustments

MANILA, Philippines – If the Energy Regulatory Commission (ERC) approves it, customers of the National Power Corporation (NAPOCOR) will experience an increase in their power bills which the state-run firm is seeking for recovery cost adjustments.

In its application received by the ERC on December 22, NAPOCOR proposed the following increase in rates:

  • P1.8279 ($0.0408198*) per kilowatt-hour (kWh) in Luzon
  • P2.1585 ($0.0482099) per kWh in Visayas
  • P1.4654 ($0.0327487) per kWh in Mindanao

If approved, the proposed rates will be implemented over two years to fully recover P1.65 billion ($36.94 million) worth of deferred fuel costs to cushion the impact on NAPOCOR’s customers in the so-called missionary areas or remote areas in the country.

The proposed rates reflect the additional operating costs incurred by NPC-SPUG (Small Power Utilities Group) as a result of the fluctuation of fuel prices used in power generation.

NPC-SPUG provides power generation and its associated power delivery systems in areas not connected to the grid.

NAPOCOR is allowed to recover the deferred fuel costs through the Generation Rate Adjustment Mechanism (GRAM).

The application for power rate hike covers the billing period from July to December 2013. 

“Since these expenses were already incurred in the year 2013, immediate recovery of the needed adjustment through a provisional authority would help alleviate the operational funding of [NAPOCOR],” it said in its 9-page application.

NAPOCOR, in a separate application, is also seeking to recover P8,996,066 ($200,967.55) in deferred foreign exchange (forex) costs  for the billing period July to December 2013 through the P0.0194 ($0.000433281) per kWh  incremental currency exchange rate adjustment (ICERA) over a 12-month period.

These expenses were incurred in the second semester of 2013 and immediate recovery of this adjustment through a provisional authority would help alleviate the firm’s operational funding, NAPOCOR said.

“The proposed ICERA is based on forex-related adjustments attributable only to NPC-SPUG operations. [NAPOCOR] finds it proper to request the [ERC] for a provisional authority,” it said in its application.

The GRAM and ICERA are two ERC-approved adjustment mechanisms allowing NAPOCOR to recover actual and incremental fuel, independent power producers (IPP), and forex rate fluctuation costs that it incurs in the course of producing electricity.

ERC requires NAPOCOR to file the GRAM and ICERA adjustments on a quarterly basis per order issued in February 2003.

NAPOCOR’s GRAM is included in the computation of the Manila Electric Company’s (MERALCO) generation charge – the biggest component of its electricity bill.


*$1 = P44.77

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