UNIVERSAL CHARGE for MISSIONARY ELECTRIFICATION
Pursuant to Section 70 of the EPIRA, which specifically mandates SPUG to undertake missionary electrification, SPUG funds its operations and capital projects in the Missionary Areas from its sales revenues in its service areas and availments from the Universal Charge for Missionary Electrification (UC-ME), which is collected from all electricity end-users.
The allocations for the UC-ME shall be based on the Missionary Electrification Development Plan, which shall be issued yearly by the Department of Energy. SPUG shall subsequently apply for the universal charge requirements for the missionary areas by filing a petition with the Energy Regulatory Commission (ERC).
The latest allocations approved by the ERC came via its Order on ERC Case No. 2003-424 dated 25 February 2005, where the ERC approved a fixed amount of P1.34 B per year for 2005 to 2008; and on 27 December 2005 and 10 February 2006, SPUG was allowed to recover from the UC-ME its deferred foreign exchange and fuel cost amounting to PhP1,369,036,915 and PhPp 863,350,078, respectively.
What is the UCME?
As stipulated in Section 34 (e) and Rule 18 of the Electric Power Industry Reform Act of 2001 (EPIRA), the Universal Charge (one among which is for Missionary Electrification) shall be a non-by passable charge that shall be collected from all End-users on a monthly basis by the Distribution Utilities or Suppliers in case of Contestable Markets. The Universal Charge for Missionary Electrification (UCME) shall be utilized for off-grid areas or Missionary areas that are not connected to the main transmission grid. As of end of June 2009, there are 90 island and 8 isolated grids all over the country that are being served by NPC-SPUG as part of its mandate to implement Missionary Electrification.
Who determines the UCME?
The Universal Charge is determined, fixed and approved by Energy Regulatory Commission (ERC). The ERC bases its evaluation of the UCME requirement on the Missionary Electrification Development Plan (MEDP).
The MEDP, as approved by the DOE, shall be the basis for determining the UCME. The required UCME is the cost differential between the sales revenues and operating expense and capital expense for expansion, rehabilitation and facilities for new areas of development.
How much UCME has been disbursed to NPC?
NPC-SPUG has been receiving UCME subsidy since 2003. However, the available UCME has never been enough to fund all operational and capital expenditure requirements of NPC-SPUG. Since 2003, NPC-SPUG has only received P7.82 Billion in subsidy against an actual requirement of P28.4 Billion.
The latest provisional authority issued by the ERC in its Order dated 17 August 209 allows NPC-SPUG P5.69 Billion (equivalent to P0.0978 /kWh) in UCME subsidy for 2009. Although this is a substantial increase from the previous years annual allocation of P1.34 Billon (equivalent to P0.0373/kWh from 2004 to 2008), the provisionally approved UCME is still insufficient to meet NPC-SPUGs needs. NPC-SPUGs operational subsidy requirement alone is estimated at around P7.723 Billion1 for 2009.
Historical Approval of the UCME
The ERC has issued a series of Orders and increases regarding the UCME since December 2002:
|
Year |
Amount Approved |
Date of Approval |
Type of Approval |
|
|
(Million Pesos) |
(P/kWh) |
|||
|
2003 |
743.552 |
0.0168 |
|
Provisional |
|
2003 |
Additional 599.76 |
0.0373 |
|
Final |
|
2004 |
1,340 |
0.0373 |
|
Provisional |
|
2005
-2008 |
1,340 |
0.0373 |
|
Final |
|
2009 |
541 |
0.0373 |
|
Provisional |
|
2009 |
5,693 |
0.0978 |
|
Provisional |
1Based on the pending 2009-2013 UCME application with the ERC filed under ERC Case No. 2009-028 RC
