State-run National Power Corp. is seeking approval from the Energy Regulatory Commission for its proposed 2023 basic universal charge on missionary electrification amounting to P20.46 billion, or equivalent to a rate of P0.1839 per kilowatt-hour.
Napocor said in an application the proposed basic UCME for CY 2023 of P0.1839 per kWh would result in an increase of P0.0659 per kWh in UCME from the provisionally approved basic UCME rate of P0.1163 per KWh for Napocor-Small Power Utilities Group and New Power Players/Qualified Third Parties.
“The recovery of the proposed basic UCME rate of P0.1839 per kWh inclusive of RE Cash Incentive for CY 2023 is vital to NPC’s subsidy requirements to maintain a reliable and stable funding source for its operating costs requirements and to ensure sufficient subsidy to NPPs/QTPs and RE developers,” it said.
It said the proposed UCME rate considered the commitment of Napocor in ensuring the required volume of fuel that would be timely paid to suppliers, payment to NPPs and QTPs, and ensuring the continuing operation of existing units.
“The proposal, when approved, will allow NPC to deliver its commitment to provide a reliable and sufficient power supply and efficient operation of its plants and its associated power delivery systems consistent with the specific programs in the missionary areas that NPC is currently serving,” it said.
NPC operates numerous small power plants located on small islands and isolated grids as mandated under the Electric Power Industry Reform Act of 2001, where electricity is very expensive.
Under the EPIRA Law, NPC can cover its missionary subsidies by charging the consumers in those areas a missionary generation rate passed on as the UCME.
NPC said the UCME subsidy will make electricity affordable in the missionary or far-flung areas.
“Also, the UCME is an avenue to support the government’s thrust of total electrification. Unelectrified, unserved or underserved off-grid areas are given provision of electricity through this subsidy,” it said.
The ERC set the hearings for the application in May and June.