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Napocor Asks ERC’s Nod for Power Rate Hike

The National Power Corporation (Napocor) recently filed a petition with the Energy Regulatory Commission (ERC) that seeks to ramp up its power rates to recover P7.3 billion in costs.

The rate hikes will affect consumers in the Small Power Utilities Group areas and nationwide power consumers under the universal charge for missionary electrification.

In its petition, Napocor seeks to recoup an average of P1.8788 per kilowatthour from consumers in the Small Power Utilities Group (SPUG) or missionary areas for the recovery of fuel costs amounting to P1.83 billion from January to June 2013.

Napocor targets cost recovery of P2.1097 from SPUG consumers in Luzon, P1.9125 per kwh from SPUG areas in the Visayas, and P1.4873 per kwh from consumers in Mindanao.

To soften the blow for customers in the missionary areas, Napocor has projected to recover the increase over a two-year period.

“The proposed deferred accounting adjustment will reflect the recent costs authorized under the generation rate adjustment mechanism and NPC would increase the revenue commensurate with its cost and ultimately reduce the burden of UC-ME on all electricity end-users,” it said.

In the performance of its missionary electrification function through SPUG, Napocor said it incurs additional operating costs due to fluctuation of prices of fuel used in power generation.

With the approval of the power rate hike, Napocor will be allowed to recover the additional cost incurred through the generation rate adjustment mechanism.