Power rate hike looms as forex, fuel cost surge


JUST as the Power Sector Assets and Liabilities Management Corporation (PSALM) lately announced the impending refund that would soon be reflected in the electric bills of consumers in Luzon and Mindanao regions, the state-owned National Power Corp (Napocor), on the other hand, is seeking an increase in electricity rates across the country to recoup higher costs brought about by a weak peso and more expensive fuel.

Napocor, in its petition filed with the Energy Regulatory Commission (ERC), said it incurred P4.21 billion in additional costs because of an increase in the price of fuel used to operate its generating plants in off-grid areas in 2012.

Off-grid areas are those not connected to the power grid operated by the National Grid Corp of the Philippines (NGCP). Consumers within the grid subsidize rates in these far-flung areas because residents there cannot afford to pay for power on their own.

Napocor contends that in order to recover the amount it allegedly incurred, an average rate hike of P1.55 per kilowatt-hour (kWh) across the country, including the off-grid areas, for four years, is necessary.

Broken down, the rate adjustment will translate to an adjustment of P1.48 per kWh for Luzon, P1.47 per kWh for the Visayas, and P1.80 per kWh for Mindanao.

Also recently, PSALM has also asked the regulatory board to refund some P1.659 billion worth of over-recoveries to Luzon and Mindanao electricity consumers.

The payback amounts account for the true-up adjustment of fuel and purchased power costs (TAFPPC) of specified power plants and true-up of foreign exchange related costs (TAFxA).

In a separate petition, Napocor asked the regulator to allow it to recover P14.48 million in additional costs arising from foreign exchange movements. The state-owned company will use the additional charge to settle foreign currency debts.

To recover the amount, Napocor proposed to hike rates only in off-grid areas by P0.02 per kilowatt-hour for 12 months.

The said petitions were filed by Napocor as part of its 10th Generation Rate Adjustment Mechanism (GRAM) and Incremental Currency Exchange Rate Adjustment (ICERA), which allow it to recover additional fuel and forex costs, respectively.

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