A disagreement over how much the government should pay to electrify remote areas in the country has caused the Energy Regulatory Commission (ERC) to delay funding requests from the National Power Corporation (NPC).
The ERC announced that it deferred action on 14 applications from NPC for Universal Charges for Missionary Electrification (UCME) spanning 2016 to 2024.
These include six basic petitions from 2016 to 2021 and eight "true-up" applications from 2017 to 2024, which adjust UCME billings to reflect actual costs.
According to ERC chairperson Monalisa Dimalanta, the decision stemmed from requiring a thorough evaluation of the applications, stating, “They were deferred just because of some questions the commission directed our Services to evaluate further.”
“We expect them to come back to us soon so we can resolve this within the first quarter,” she added.
The series of piled-up petitions includes the NPC’s request to have its availment from the UCME approved from 2016 to 2021, while the true-up applications include the adjustment of UCME billings from 2017 to as recent as last year.
Once resolved, these could lessen the financial issues that affect electrification in off-grid areas.
Dimalanta also explained that the UCME is a subsidy, however, NPC believed it still needs the Return on Rate Base (RORB) for its missionary electrification services, which includes powering remote areas in the country.
“One of which is whether or not NPC is entitled to receive 12 percent RORB on top of its cost recovery for missionary electrification,” she said.
“The Commission had previously denied this claim, given that UCME is already a subsidy provided by end-users, but NPC asked for reconsideration.”
Furthermore, NPC has defended its stand that it should still be receiving returns annually.
“NPC’s position is that the EPIRA did not repeal the provision in their charter as regards RORB. So their claim is that as a rule they are still entitled to RORB every year,” Dimalanta added.