NPC cost recovery hikes power bills by P12.68

NPC cost recovery hikes power bills by P12.68 | Daily Tribune

The UCME will rise by P0.0634 per kWh to P0.3397 per kWh from the current P0.2763 per kWh beginning the October billing period.

That means households consuming 300 kWh will pay P19.02 more each month, while those using 500 kWh will see an additional P31.70 on their bills.

Power subsidized in missionary, off-grid communities

The charge is collected from electricity users nationwide to subsidize power in missionary and off-grid communities, where generating electricity is generally more expensive because many areas still rely on diesel and bunker fuel.

The increase stems from the ERC’s resolution of 26 NPC rate cases that had been pending for years, some dating as far back as 2013.

In a single Omnibus Order, the regulator restored P23.52 billion in NPC costs that had previously been disallowed. The cases cover expenses incurred from 2012 to 2022.

Of the total, P16.54 billion represents NPC’s 12-percent return on rate base. The ERC also restored certain personnel and operating expenses as well as P2.70 billion in subsidies that NPC had already paid to private providers serving off-grid areas.

The ERC said the additional funds would help settle long-outstanding subsidy claims and keep NPC and private providers serving remote communities as rising fuel costs make electricity generation in these areas more expensive.

“Some of these cases were first filed in 2013, and the uncertainty was not serving anyone, least of all the consumers in our island and off-grid communities,” ERC chairperson and CEO Francis Saturnino C. Juan said.

“The Commission had to act to ensure the continued viability of NPC’s operations and to support the regulatory framework for the missionary areas, which depends on NPC and private providers being paid what the law and the supporting documents allow, on time,” he added.

Conditions attached to the recovery

But the regulator also attached conditions to the recovery, requiring NPC to channel its restored return toward investments that could eventually bring down the cost of supplying electricity to off-grid communities.

These include replacing old generating plants with more fuel-efficient facilities, hybridizing existing plants and deploying battery energy storage systems.

Starting with its 2028 UCME petition, NPC must report how the money was used. Amounts that cannot be shown to have gone toward the prescribed investments will be deducted from its allowed revenue requirement in the succeeding period.