Napocor submits petition to adjust rates nationwide

MANILA, Philippines - State-owned National Power Corp. (Napocor) has finally filed its application to revise rates for the Luzon, Visayas, and Mindanao grids in compliance with regulators’ orders. The Energy Regulatory Commission (ERC) had earlier directed Napocor to explain why it had not filed the petition, expected to lead to lower power rates in parts of the country. Napocor asked for more time, and its petition was finally filed on Tuesday. If approved, the generation rate adjustment mechanism (GRAM) and incremental currency exchange rate adjustment (ICERA) petition would result in a decrease in Luzon electricity rates of about P0.40 per kilowatt-hour (kWh), an additional P0.15/kWh for the Visayas, and a cut of P0.0039/kWh for Mindanao. An application for a basic rate adjustment, meanwhile, sought to reflect the privatization of 112-megawatt (MW) Pantabangan-Masiway hydroelectric plant in Nueva Ecija, 360-MW Magat hydroelectric plant in Isabela, and the 600-MW Masinloc coal-fired plant in Zambales. "Considering that more than 40% of Napocor’s generation assets have already been sold ... to private investors, Napocor found the need to file this application to reflect the true cost of electricity," the state-owned firm said. The revised rate petition said this would lead to adjustment in the Luzon generation rate to P4.265/kWh from P3.89/kWh. Combined, the applications would result in a decrease of P0.0362/kWh in Luzon and P0.0039/kWh in Mindanao, and a increase of P0.1591/kWh in the Visayas. ERC chairman Rodolfo B. Albano, Jr. said the commission had yet to determine if they would give Napocor a provisional authority. "We are currently evaluating it, and we’ll probably tackle it ... next week," he said. "If approved, the new rates will be reflected on electricity bills for June 26." Asked why power rates would rise in the Visayas, Napocor spokesman Dennis Gana said "The expenses in Visayas are higher considering that we rely on diesel plants, which are very expensive to operate due to the rising price of oil." The applications, for the period covering July 2006 to March 2008, were estimated to have been marked by a P10 billion or a P0.20/kWh over-recovery. GRAM allows for periodic adjustments in generation rates to reflect changes in fuel and purchased power costs. ICERA does the same with respect to foreign exchange movements. - BusinessWorld