Distributed brownouts set for 1.3-M off-grid consumers

State-owned National Power Corp. (NPC) is planning to distribute equally to 1.3 million household customers in off-grid areas whatever power interruptions it may encounter.

NPC President Fernando Martin Y. Roxas indicated a scenario of “equal misery" or "unity" in the land of darkness if it fails to get additional budget to improve its operations, primarily on procuring the scale of fuel needed to power the affected off-grid or island-grid jurisdictions.

“Of course, the big issue is the funding deficit. There is fuel to be bought, but the problem is the lack of money that we can use to buy (fuel)...so, if we can work together to manage rationing, it will be better for everybody,” he said.

Still, Roxas assured that “NPC will continue to do its best to garner additional funding. But at some point, we have to be prepared to actually bear some of the costs.”

As presented by Odette Rivero, manager for Strategic and Business Planning Division of NPC, a worst-case scenario portends that even the off-grid areas that currently have 24-hour electricity services will suffer supply curtailment and may only have power for 15 hours.

Additionally, for the off-grid power utilities that have 16-hour operations at present, their customers will have to endure reduced electricity services to just 12 hours, while those that are lower in the totem pole of just 16-hour operations will only accord their customers with 5-hour service.

Rivero specified that the supply curtailments can only be avoided “provided NPC will have budget augmentation to procure additional fuel that will last up to December 31, 2023.”

She noted that the company has funding shortfall of P3.713 billion for its fuel procurements alone; adding that the total budget needed by the company had been pegged at P11.484 billion, while its available cash only hovers at P7.526 billion.

On aggregate terms, the total volume of fuel that NPC will be needing full-year had been estimated at 150,555 kiloliters; but the only available supply procured had been at 100,608 kiloliters – and that is due to run out by August 31 this year. As calculated, the deficit on the state-run power firm’s fuel requirements would be 49,947 kiloliters.

The total corporate operating budget (COB) of NPC for this year had been pegged at P41.850 billion – and since there had been upward adjustment on the cost of its fuel procurements (as based on P74.3475 per liter price), it will be needing funding augmentation of P19.505 billion versus the General Appropriations Act (GAA) level of P22.345 billion.

Apart from the targeted P5.0 billion loan, the state-run power firm has also been seeking subsidy support from the national government that may be released by the Department of Budget and Management (DBM); reimbursement from the Department of Finance (DOF) on expenses utilized for the mothballed Bataan Nuclear Power Plant (BNPP); possible assistance from electric cooperatives (ECs) and local government units (LGUs); as well as timely approval of its more than P30 billion worth of applications for true-up (adjustment) on the universal charge for missionary electrification (UCME) that are currently pending with the Energy Regulatory Commission.

Energy Secretary Raphael P.M. Lotilla emphasized that at this point, “there is continued delivery of supply to the missionary areas...the problem is with the price of the fuel.”

He expounded “there is enough fuel out there, provided we are able to afford them at the price that it’s being sold.”

The energy chief explained that regulatory action on the pending UCME applications of NPC will be critical, “because right now, it is the universal charge for missionary electrification that is answering for the subsidy; and unfortunately, there are applications as far back as 2014 that have not been acted upon – and that amounts to P30 billion. So, these applications for true-up have affected the finances available under the UCME.”

He further stated “even if the ERC is going to catch up with the required pace for approving those, then it will be the on-grid customers that will have to take up that burden. So, it is a case that the national government is trying to address in a balanced way - that all will have to share in the burden of addressing this.”