TAGUIG CITY – Department of Energy (DOE) Secretary Alfonso G. Cusi asked National Power Corporation (NPC) President Pio J. Benavidez to improve the Corporation’s operating efficiency and reduce the true costs of generation and missionary subsidies in off-grid areas before moving to increase generation rates to be shouldered by electricity consumers.

This directive came after careful consideration of the formal application filed by the NPC with the Energy Regulatory Commission (ERC) to increase the missionary generation charge in off-grid islands in Luzon by a total of PhP 2.9140 per kilowatt hour (kwh). This would raise said charge from the current rate of PhP 5.6404 to PhP 8.5544/kwh.

In his memorandum to NPC President Benavidez, Secretary Cusi expressed serious concern over the generation charge of PhP 8.5544/kwh, compared to the PhP 5.25/kwh charge in Manila, being a heavy burden to Filipino consumers in the poorer, off-grid islands. This is contrary to the government’s mandate to keep power rates affordable under the Electric Power Industry Reform Act (EPIRA) of 2001. 

He further directed the NPC “to reduce missionary subsidies instead of passing on to these poorer areas the costs of excess taxes and fuel and other costs that will cause this 51% increase in their P5.6404 SAGR.” 

Under ERC Application No. 2018-048RC, the NPC also applied to pass on the added excise taxes on fuel being used to generate power in off-grid islands (PhP 1.9648/kwh) to consumers. This is on top of its previous application for an increase of PhP 0.9492/kwh, bringing the total increase to PhP 2.9140/kwh. 

The NPC is the administrator of the missionary subsidies provided by the government to consumers through the local electric cooperatives. Under the EPIRA Law, NPC can cover its missionary subsidies by charging the consumers in those areas a missionary generation rate called the subsidized approved generation rate (SAGR), with the remainder likewise passed on as the universal charge for missionary electrification, or UC-ME. 

In addition, the Energy Chief stated in his memorandum that “the DOE, in turn, will review the power supply contracts of existing private power generators to identify and possibly eliminate onerous provisions”. 

NPC was asked to submit all existing contracts at the soonest possible time, and 30 days to submit its action plan on the matter. 

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