NPC power rates to go up by P3/kwh within 3 years
posted 13-Jan-2019  ·  
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Power rates will increase by at least P1.88 per kilowatt-hour beginning this year and by nearly three pesos within three years once the Energy Regulatory Commission (ERC) approves a petition filed by the National Power Corporation for a higher Subsidized Approved Generation Rate (SAGR) due to the increase in excise tax on fuel under the TRAIN law.

Last Dec. 19, 2018, the ERC through Commissioner Josefina Patricia Magpale-Asirit issued an order setting the conduct of hearings on the petition, with that for Catanduanes set on April 11, 2019 at the main office of the First Catanduanes Electric Cooperative, Inc. (FICELCO) at Marinawa, Bato.

The petition was actually filed on May 24, 2018, with the power firm praying for the issuance of a provisional authority to implement the proposed new SAGR in its Small Power Utilities Group (SPUG) areas primarily because of the higher tax on fuel from 2018 to 2020 under the Tax Reform for Acceleration and Inclusion (TRAIN) of the Duterte administration.

The existing SAGR is P5.6404/kwh but the figure appearing in the customers’ power bill is lower at P5.5514 due to the use of cheaper hydroelectric power this rainy season, a cooperative official explained.

“(An) increase in electricity prices is evident since NPC-SPUG uses diesel and bunker fuel in its power plants,” the state-run company stated. “(This) is tantamount to an increase in operating cost in the SPUG areas, effectively contributing to the increase of the Universal Charge for Missionary Electrification (UC-ME) which the main grid customers also pay along with the off-grid customers.”

For Luzon areas, including Catanduanes, the SAGR should increase by P0.9392 per kwh in 2018, P1.4609/kwh in 2019, and P1.9648 by 2020.

This does not include a potential increase of P0.9492/kwh which is being sought by NPC under a separate petition filed before the ERC in 2014 which has yet to be resolved.

Should the petition be granted, the SAGR for Luzon will go up by a total of P1.8884/kwh for 2018, P2.4101/kwh for 2019, and P2.9140/kwh for 2020.

This will result in effective power rates of P13.98 per kwh for 2018, P14.55/kwh for 2019 and P15.10/kwh for 2020.

Power bills would actually reflect a higher rate hike due to the 12% Value Added Tax (VAT) imposed by the Bureau of Internal Revenue (BIR) on the Generation, Systems Loss, and Distribution components of the power rate.

    The Sunwest Water & Electricity Co, (SUWECO), the Catanduanes grid’s biggest supplier of electricity with most of its production coming from back-up diesel power plants, need not file a rate hike petition as its power rate is pegged on the NPC SAGR.An official of the cooperative told the Tribune he is not aware of a similar rate hike petition to be filed by the Sunwest Water & Electricity Co, (SUWECO), the Catanduanes grid’s biggest supplier of electricity with most of its production coming from back-up diesel power plants.

In asking the ERC for provisional authority, the NPC said that since the last level of SAGR approval was made in 2003, the fuel cost has risen by about 114% even without the TRAIN Law.

“Due to the TRAIN Law, the fuel cost will increase by P0.8293/kwh in 2018, P1.4815/kwh in 2019 and P1.9919/kwh in 2010,” it claimed, adding that the impact will greatly affect its power plant operations if the corresponding cost will not be immediately recovered as incurred.

In setting the schedule of hearings for SPUG areas to be affected by the higher subsidized generation rates, the Commission ordered NPC to cause the publication of the Notice of Hearing, furnish copies to local officials and distribution utilities and inform consumers within the affected areas of the filing, its reasons therefor and of the scheduled hearing.

NPC and all other interested parties are require to submit at least five (5) days before the initial hearing and pre-trial conference, their respective Pre-Trial Briefs containing a summary of admitted facts and proposed stipulation of facts, issues to be resolved, documents or exhibits to be presented, and the list of witnesses and written testimonies.

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