NPC-SPUG Files UCME 2009-2018 Petition

In compliance to its mandate under R.A. 9136 or the Electric Power Industry Reform Act (EPIRA) of 2001, NPC-Small Power Utilities Group (NPC-SPUG) filed its Universal Charge for Missionary Electrification (UCME) petition with the Energy Regulatory Commission (ERC) on 15 May 2009. The petition is intended to support the implementation of the missionary electrification program as embodied in the Missionary Electrification Development Plan (MEDP) for 2009-2013. Under the MEDP for 2009-2013, which was issued by the Department of Energy (DOE) on 19 January 2009, NPC-SPUG shall undertake, among others, to:


1. Provide additional capacity of 53.76 MW to improve the power supply and support the expansion of service hours in the SPUG areas. The 2009-2013 MEDP sets out the power generation facilities and associated power delivery systems to be provided in existing NPC-SPUG areas and newly transferred areas. NPC-SPUG will maintain and/or improve the service levels of its existing power facilities through rehabilitation, improvement, replacement of parts and equipment, and will meet the growing demand in its coverage areas through construction of additional capacities, as follows:



2. Transfer to SPUG twenty (20) power generation systems from local government units and electric cooperatives that cannot sustain efficient operations due to high fuel and maintenance costs.


3. Prepare missionary areas to become viable and sustainable for eventual private investment by new power producers (NPPs) and qualified third parties (QTPs).


4. Implement missionary and off-grid electrification under the Expanded Rural Electrification Program, through the extension of distribution lines of electric cooperatives or the installation of mini or micro grids or decentralized systems in small islands and unviable areas, including household electrification programs.


5. NPC-SPUG will also install power delivery systems to ensure efficiency and reliability of power supply, as follows:



To support its operation and the projects under the 2009-2013 MEDP, NPC-SPUG will require subsidies for the next five (5) years summarized as follows:



Since the 01 May 1988 proclamation of then President Corazon C. Aquino directing NPC and NEA to lower the cost of electricity in the islands to P2.50 per kWh nationwide, NPC, through the Small Island Grid Operations has been subsidizing the operations in the island grids. From a subsidy of P16 million in 1988 the fund advances made by NPC has grown by more than 600 times (or 30,000%) to P10.22 billion in 2008. In the six year period from 2003 to 2008, NPC has advanced P20.58 billion in subsidy to the island grids.


The situation in 2009 is critical not only since the ERC has only approved P500 million in UCME availments (pending the approval of the UCME 2009-20013 petition by NPC-SPUG), but also because of the privatization of major NPC plants and the signing of the Operations & Maintenance Agreement (OMA) with PSALM. Because of the OMA and the subsequent 'separation of books', NPC-Main Grid will no longer be able to advance funds/subsidies to NPC-SPUG.


Section 70 of Republic Act No. 9136 or the EPIRA specifically mandates NPC-Small Power Utilities Group (SPUG was formerly the Small Island Grid Operations) to be responsible for providing power generation and its associated power delivery systems in areas that are not connected to the transmission system, i.e. the island grids. Section 70 also stipulates that funds for the operations of SPUG shall come from the revenues from sales in the missionary areas and from the Universal Charge for Missionary Electrification (UCME) as determined by the Energy Regulatory Commission (ERC).

 

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