Diesel plants’ woes may cause outages
Napocor submitted an original proposal of P44.749 billion for 2023 but the Department of Budget and Management slashed the proposal by nearly 30 percent
Daily TribuneNapocor submitted an original proposal of P44.749 billion for 2023 but the Department of Budget and Management slashed the proposal by nearly 30 percent
Widespread power outages are feared to disrupt missionary areas or those not connected to the national grid covered by the Small Power Utilities Group in less than a year due to the shutdown of diesel plants and its inability to pay fuel suppliers.
Jenalyn Aurea Tinonas, Department Manager for Financial Planning and Budget of state-owned National Power Corp., estimated that approximately 278 existing diesel plants would likely be closed following its P12.537 billion budget cut.
"Delayed payments (to SPUG gencos and QTPs) may result in power outages affecting 834,285 households nationwide. It will also result in the deferment of the scheduled energization of 44 new unserved areas affecting 15 areas in Luzon, 14 in the Visayas, and 15 in the Mindanao area, composed of 30,940 total households in the remote islands," she explained.
However, Tinonas said the Napocor has lined up several measures to address these scenarios, such as getting Energy Regulatory Commission approval of its pending applications, funding support from the government, borrowings, and possible reimbursement of costs for the preservation of the Bataan Nuclear Power Plant, which reached P404.5 million.
Napocor submitted an original proposal of P44.749 billion for 2023 but the Department of Budget and Management slashed the proposal by nearly 30 percent.
SPUG needs more funds
Tinonas pointed out that the P32.212 billion DBM recommended level would not be enough to cover Napocor's full-year operation requirements intended for SPUG plants and barges, as well as its New Power Providers and Qualified Third Party subsidy requirements.
"If the price of fuel continues to increase, this will become an even bigger dilemma," she emphasized.
Based on the General Appropriations Act, the approved fuel budget of P6.385 billion for SPUG missionary areas was based on a price assumption of P37.99 per liter diesel fuel price. Beginning last June, however, fuel prices abruptly increased to as high as P79.66 per liter.
The fuel price hike was ostensibly one of the reasons why SPUG generation companies (gencos) have racked up substantial outstanding obligations to fuel suppliers.
Given the volatility of prices and the slow release of funds from the Napocor, many fuel suppliers are now reportedly reluctant to deliver more fuel on credit.
Just last month, the Sultan Kudarat Electric Cooperative, Inc. was forced to bypass the NPC and buy 120,000 liters of diesel fuel directly from Petron, to avoid plunging the whole area of Kalamansig and Lebak, 11 barangays in Palimbang, and two barangays in Esperanza, Sultan Kudarat, and Sitio Guila-guila in Upi, Maguindanao in darkness.
