Froilan Tampinco, the company president, told reporters in a recent interview that Napocor hopes the Energy Regulatory Commission (ERC) would grant its petition for the 7-centavo increase.

He said Napocor has the same financing requirement for the year but the government has prohibited Napocor from tapping moneylenders to fund its capital requirements.

The additional cost will enable Napocor-Spug to continue its operations in remote areas and to prevent the shortage of fuel and consequent shutdown of power plants.

The Spug has been recently granted by the ERC a provisional authority to collect an additional 7.09-centavo per kWh from consumers through the UCME. To date, Napocor-Spug collects 11.63-centavo per kWh from consumers through the UCME.

The unit also asked the ERC for approval of the 12-percent return-on-rate base (RORB) to allow it to guarantee continuous operation in remote areas.

It said the provisional authority did not provide for the RORB that would allow for at least two months worth of working capital, for unrecovered operating expenses, and for capitalized maintenance expenses of the generating plants.

The Napocor-Spug argued that its financial capability of sustaining its operations will be drastically impaired without a reasonable RORB, adding that it also subsidized new power providers with a total of P693.6 million last year that resulted in a deficit of P334.6 million from the approved amount of P310 million for the same year.

On May 19, Napocor filed a petition for a 27.95-centavo per kWh adjustment to the UCME to recover the shortfall in revenues resulting from higher fuel costs and foreign exchange fluctuations, adjustments in the true-cost of generation of new power provider, and a 12-percent RORB to cover its working capital from 2003 to 2009.

Section 70 of the Electric Power Industry Act of 2001 provides that the Napocor, notwithstanding the privatization of its assets, shall continue to perform the missionary electrification through the Napocor-Spug and will be responsible for providing power generation and its associated power delivery systems in the areas that are not connected to the transmission system.

The Department of Budget and Management recently disbursed P1.6 billion as part of Napocor’s advances for the maintenance of the Bataan nuclear power plant.

Tampinco earlier said P1.3 billion of the P1.6 billion will be spent to fund fuel expenses for its Napocor-Spug’s operations. Half of the balance will be spent for critical spares and the rest to pay-off generator set rentals.