𝐍𝐚𝐩𝐨𝐜𝐨𝐫 𝐫𝐞𝐚𝐜𝐡𝐞𝐬 𝐨𝐮𝐭 𝐭𝐨 𝐞𝐧𝐞𝐫𝐠𝐲 𝐚𝐠𝐞𝐧𝐜𝐢𝐞𝐬, 𝐜𝐨𝐨𝐩𝐬, 𝐬𝐞𝐞𝐤𝐬 𝐚𝐢𝐝 𝐢𝐧 𝐦𝐚𝐧𝐚𝐠𝐢𝐧𝐠 𝐟𝐮𝐧𝐝𝐢𝐧𝐠 𝐠𝐚𝐩𝐬
State-owned National Power Corporation (Napocor) said that it met agencies in the energy family including the electric cooperatives it serves to seek assistance in mitigating the impact of its insufficient funds for off-grid island operations in 2023.
Napocor President and CEO Fernando Martin Y. Roxas said that Napocor’s top management has always been in close coordination with the Department of Energy (DOE) and the government agencies in its Board since the surge in fuel price last year depleted its 2022 funds and now renders its 2023 approved budget deficient.
“At the onset of this year, we began meeting the National Electrification Administration (NEA) and our customers and stakeholders like the Association of Isolated Electric Cooperatives (AIEC), the electric cooperatives/distribution utilities, and the New Power Providers (NPPs) and Qualified Third Parties (QTPs) to be transparent to them about the challenges we now confront,” Roxas said. Under Napocor’s corporate operating budget in the 2023 General Appropriations Act (GAA), P6.886 Bn was allocated for fuel for Small Power Utilities Group (SPUG) operations, while P10.371 Bn was apportioned for UCME subsidy for NPP/QTPs, with an assumed fuel price of P55.0428/liter.
However, with the surge in fuel prices, the contracted fuel for 2023 was priced at P74.3475/Liter. The approved budget for fuel supply can then cover only eight (8) months of operations in SPUG areas. To sustain its full-year operations, Napocor needs budget augmentation in the amount of P3.883 Bn for the SPUG fuel supply. Meanwhile, based on the latest actual average monthly billing as of January 2023, the fuel price assumption for NPPs/QTPs’ subsidy was P69.00/liter. The approved budget for NPP/QTP can then cover only five (5) months. To sustain their full-year operations, Napocor needs budget augmentation in the amount of P14.670 Bn for UCME subsidy to NPPs/QTPs. Currently, payment of subsidies to private power suppliers continues to be delayed due to limited funds.
Roxas said that reducing the operating hours in Napocor’s SPUG plants is an option to stretch the fuel supply until December 2023, but this should be the last resort. He said that the corporation is doing every measure and meeting every agency that can help to prevent curtailment of service. Napocor operates 156 plants, 84 of which enjoy 24/7 power supply while the rest has 16 hours and below of power supply. With the help of the DOE and other concerned government agencies, Napocor currently pursues measures to bridge the funding gap including its five billion loan from the Land Bank of the Philippines, approval of UCME petitions by the Energy Regulatory Commission (ERC), seeking additional subsidies from the National Government, or possible assistance from electric cooperatives and local government units for advance payment or alternative fund sources for fuel procurement.
“On these undertakings, we are happy to have gained the Monetary Board Opinion to proceed with the loan as well as budgetary support from the DBM,” shared Roxas. Napocor is also working on its long-term sustainability plan with the DOE and other energy agencies to mitigate the impact of high fuel prices on its operations. Part of this plan are the accelerated hybridization of SPUG power plants with renewable energy resources, preparations for “UCME Graduation” through the interconnection of major island grids to the main grid, and preparations for “UCME Rationalization” through customer classification in missionary areas. Napocor, along with the private sector through the NPPs and QTPs, is responsible for the power generation function in some 169 off-grid areas in the country, while the electric cooperatives and some local government units assume the role of distribution utility.