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By Claire-Ann M. C. Feliciano, Senior Reporter

Subsidy bill for off-grid sites to drop

Posted on September 16, 2014

AMID concerns over a power shortage in mid-2015 that could drive up generation rates, consumers may still find some relief as at least one electricity bill component could dip in the next two years.

The National Power Corp. (Napocor) wants to collect P23.46 billion from electricity end-users in 2015 and 2016 to cover the subsidy for providing power to areas not connected to the grid, according to a petition published in a newspaper yesterday.

The state-run power firm sought the Energy Regulatory Commission’s approval for the proposed universal charge for missionary electrification (UCME) totaling P12.094 billion for 2015 and P11.371 billion for 2016, both of which will be spread out over 14 months.

These costs -- which take into consideration an updated higher subsidized approved generation rate (SAGR) to be paid by cooperatives powering off-grid areas -- are equivalent to a proposed new UCME of P0.1476 per kilowatt-hour (/kWh) per month for 2015 and P0.1467/kWh monthly for 2016.

The charges mentioned in the petition will replace the current P0.1561/kWh UCME.

“This, in effect, would yield a reduction in the UCME billing rate by... P0.0085/kWh and P0.0094/kWh... as compared to the existing UCME of P0.1561/kWh with RE (renewable energy) cash incentive,” Napocor said.

Collections will be used to finance Napocor’s operations in areas under its Small Power Utilities Group (SPUG).

The state company noted that its petition reflected higher fuel cost under the updated SAGR, which was initially based on a 2003 cost level.

“We considered the SAGR in this petition, so the bottom line is lower UCME,” Napocor President Ma. Gladys Cruz-Sta. Rita said via text message.

The SAGR, according to Ms. Cruz-Sta. Rita, is the generation rate paid by cooperatives powering SPUG areas.

The remaining costs for electrification of these sites are shouldered by consumers in grid areas through the UCME component of power bills, as provided by Republic Act No. 9136, or the Electric Power Industry Reform Act of 2001 (EPIRA).

Napocor then remits the collections to new power producers (NPPs) and RE developers operating in off-grid areas.

Ms. Cruz-Sta. Rita further explained that “total amount in 2015 is divided by projected energy sales for 14 months to get the rate for that year, which in turn will be collected from Jan. 2015 to Feb. 2016.”

“The total for 2016, on the other hand, will be charged starting 2016 until February 2017,” she added.

In the petition, Napocor said: “The proposed UCME rate adjustment... is necessary in order to cover the subsidy requirement and at the same time, maintain reliability and stability of sufficient funding source for its fuel and other costs requirements including guaranteed sufficient payment for NPP and RE developers.”

The state-run firm further said that delayed implementation of projects that are being funded by the UCME will hamper the development of off-grid areas.

Hence, timely approval and collection of these charges is needed to guarantee continuous power supply and sustainable development of such sites.

Napocor’s SPUG is mandated by the EPIRA to provide electricity to remote barangays and villages -- mainly on islands -- that are not connected to the country’s power grid.

Areas considered outside the country’s grid include Mindoro, Marinduque, Palawan, Romblon, Masbate, Siquijor, Zamboanga, Sulu and Tawi-Tawi.