Napocor seeking to dispose of missionary fund excess

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THE National Power Corp. (Napocor) has asked the Energy Regulatory Commission (ERC) to allow it to offset the excess of the basic universal charge for missionary electrification (UCME) against the P17.805 billion that has yet to be collected for 2019.

The excess, which it placed at around P1.484 billion for 2016, is covered by a provisional authority previously granted by the commission.

Napocor also asked to be given a choice to offset the excess against the unrecovered amounts under previous years — from 2012 to 2015. It placed the total pending petitions at around P17.645 billion. The company said that of the pending amount, it had recovered P11.947 billion, leaving a balance of P5.698 billion.

The government-owned and -controlled corporation also asked the ERC that the unpaid balance of the renewable energy developer’s cash incentive amounting to P15.037 million be charged to all electricity end-users at an equivalent amount of P0.0002 per kilowatt-hour (/kWh).

Napocor is the government agency tasked to perform the missionary electrification function through its small power utilities group (SPUG). It is responsible for providing power generation and its associated power delivery systems in areas that are not connected to the power transmission system.

Missionary electrification is funded from the revenue coming from power sales in these areas and from the universal charge to be collected from electricity users as determined by the ERC and in line with provisions of Republic Act. 9136 or the Electric Power Industry Reform Act (EPIRA) and its implementing rules and regulations.

Napocor said the total P1.484 billion excess translates to P0.0162/kWh using the 12-month projected energy sales nationwide for 2019 and the shortfall for the renewable energy developer’s cash incentive.

The company has a pending application for provisional approval to collect in 2019 up to P17.805 billion from electricity users or an increase to P0.1948/kWh in their power consumption.

In its petition filed in July before the ERC, Napocor said the UCME it is seeking to collect will result in an increase of P0.0768/kWh from the previous rate.

It said the proposed basic UCME “is necessary in order to cover the required subsidy requirements and at the same time, maintain a reliable and stable funding source for its operating costs requirements.”

It said the amount includes subsidy for payment to new power providers, renewable energy developers, and qualified third-parties that have taken over in full or in part the power generation function of Napocor in certain areas.

Napocor said the lack of funds from the UCME subsidy and from supposedly transitory funds that can be sourced through loans “will definitely affect flexibility in [the company’s] funding and operation.” The court has suspended its authority to borrow funds or enter into a loan agreement.

In its petition, Napocor computed the proposed UCME based, among others, on the fuel cost for 2019, which was derived from the actual 2017 fuel cost in peso per kilowatt-hour multiplied by the projected energy sales. Many of the plants in off-grid areas are diesel-fueled.

It also factored in the excise tax on fuel based on next year’s projected quantity/volume multiplied with approved rate of P4.5 per liter under R.A. No. 10963 or the Tax Reform for Acceleration and Inclusion, or TRAIN law.

The company also considered other costs, including operating expenses, cost of personnel services and depreciation. — Victor V. Saulon