NPC Goes After Unpaid FCAs; Rower-Rate Hikes Loom Over Catanduanes

VIRAC, Catanduanes—The National Power Corp. (NPC) is seeking to recover some P4.9 billion in deferred fuel-cost adjustments (FCA) from the Universal Charge for Missionary Electrification (UCME) of its Small Power Utilities Group (SPUG) nationwide.

The amount represents the deferred FCAs accumulated during the period December 26, 2005 to December 25, 2007.

In its petition for the fourth generation rate adjustment mechanism (GRAM) with the Energy Regulatory Commission (ERC), the NPC said it intends to recover the amount over a year through the application of an additional P8.1340 per kiloWatt-hour (kWh) charge to its SPUG consumers.

This additional charge would be on top of the existing subsidized and approved generation rate (SAGR) of P5.6404/kWh.

Copies of the petition have recently been circulated among Catanduanes’s local government units, media organizations and officials of the First Catanduanes Electric Cooperative (FICELCO) here.

The ERC has set a public hearing on the petition on June 25 and 26 at its Pasig City office.

From Catanduanes alone, the NPC said a total of P276,466,280 in FCAs has to be recovered, and once the petition is granted in its entirety, its generation rate for the island province would climb to P13.7744/kWh.

Adding the new generation rate to the distribution costs and various charges being imposed by FICELCO would bring local power rates to as much as P18/kWh or 80 percent over the current rates, according to provincial Gov. Joseph Cua.

In its fourth GRAM application, the NPC-SPUG said that in its performance of missionary electrifications function, the state-owned energy firm has incurred additional fuel and purchased power costs without the benefit of any recovery through rate adjustments, contributing to its deteriorating financial condition.

Apart from the application for the recovery of the P4.9-billion deferred FCAs for 2005 to 2007, the NPC-SPUG also had the third GRAM petition to recover some P2 billion in uncollected FCAs for 2004 and 2005 that is yet to be acted upon by the ERC, said Edwin Tatel, the NPC plant supervisor here.

Power supply of the province is derived from a 3.6-megawatt diesel-fed generator set owned by the NPC and operated by the Catanduanes Power Generation Inc. (CPGI), a local power provider.

NPC provides for the fuel requirement of the genset that consumes about 2,200 liters of diesel per month costing some P500,000.

The fuel subsidy represents a government incentive for CPGI for its entry into the power industry as a new provider, its manager Gerry Abrogar said on Tuesday.

Electricity in Catanduanes is expensive given its geographical location that is very far from the Bicol mainland, which plays host to two geothermal-energy sources—the BacMan and Tiwi plants with a combined output of about 500 megawatts, Abrogar said.

However, he said the island province expects to enjoy cheaper electricity once the CPGI and Sunwest Water and Electricity Company complete the construction of hydroelectric plants in the area.

Written by Danny O. Calleja / Correspondent
Wednesday, 24 June 2009 01:01
Source: BusinessMirror Online