News & Events

March 22, 2016

Lawmaker to block Napocor’s proposed power-rate hike

A party-list lawmaker on Sunday vowed to block the proposed power-rate increase of the National Power Corp. (Napocor) supposedly for its recovery-cost adjustments.


Rep. Neri Colmenares of Bayan Muna said customers of the Napocor will experience an increase of P2.06 per kilowatt-hour (kWh) in Luzon; P2.32 per kWh in the Visayas; and P1.45 per kWh in Mindanao once the Energy Regulatory Commission (ERC) approves the firm’s application for recovery-cost adjustments.


The proposed rates, the Napocor said, reflect additional operating costs incurred by the Napocor-Small Power Utilities Group as a result of the fluctuation of fuel prices used in power generation.


According to Colmenares, Napocor’s application covers the billing period from January to June 2014, and would pass on to customers P1.89 billion worth of their fuel costs over two years.


The Napocor is allowed to recover this deferred fuel costs through the Generation Rate Adjustment Mechanism (GRAM).


It seems that the Napocor is trying to pull a fast one, especially now that most Filipinos are busy with holiday preparations and the upcoming elections. Fuel prices have been down since last year and at their lowest in decades why are they saying that they have to recover fuel costs?” Colmenares asked.


The lawmaker said he is now coordinating with the ERC as to the status of the Napocor petition, and is set to file a motion to intervene to stop these rate hikes.


What is worse, though, is that in a separate application, the Napocor is also seeking to recover another P8,774,702 in deferred foreign exchange [forex] costs  for the billing period of January  to June 2014 through the imposition of a P0.0178-per-kWh incremental currency exchange-rate adjustment [Icera] over a period of 12 months,” he said.


In a BusinessMirror report, the Napocor said the proposed adjustment is “fair and reasonable as it is computed in line with the GRAM rules.”


Also, it added that the proposed Icera, which was approved by the Napocor Board, is “fair and reasonable.”


The GRAM and Icera are two ERC-approved adjustment mechanisms designed to allow the Napocor to recover actual and incremental fuel, Independent Power Producers and forex fluctuation costs that it incurs in the course of producing electricity.


Meanwhile, House Deputy Minority Leader Arnel Ty said the decision of the Organization of the Petroleum Exporting Countries (Opec) to keep producing oil at current high levels will benefit the Philippines—a net oil importer.


Ty said in a statement that Filipino households, businesses and even the government, which is a huge consumer, would gain in a big way from a prolonged low-cost oil environment.


It basically means that the Philippines will continue to benefit from low-priced oil in the months ahead,” he said.


According to Ty, oil prices plunged below $40 per barrel immediately after the Opec decided on Friday to maintain current production levels at around 31.5 million barrels of oil per day, despite a growing surplus in world markets.


The decision implies that a global oversupply of between 700,000 to 1.8 million BOPD would keep a steady downward pressure on oil prices, the lawmaker added

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