The National Power Corporation (Napocor) urges the Energy Regulatory Commission (ERC) to expedite action on petitions to increase power rates for Small Power Utilities Group (SPUG) plants, crucial for islands and remote communities, including those in Palawan.

Napocor president and CEO Fernando Martin Roxas pointed out the urgent need for rate adjustments to cover escalating fuel costs.

SPUG plants, mainly diesel-fired, are essential for areas not connected to the main transmission grid.

Napocor currently operates and maintains a total of 27 SPUG plants in Palawan.

Roxas explains that Napocor’s current diesel rate for SPUG plants is ₱36 per liter, while procurement costs stand at ₱68 per liter, plus an additional ₱6 to ₱7 for hauling to the islands.

This discrepancy means NPC is recovering less than one-third of its costs, leading to significant financial losses.

“To sustainably purchase fuel, we need at least an 8-cents per kilowatt hour increase in SPUG power plants, which can generate around P8 billion,” Roxas stated.

Despite securing a ₱15-billion loan for fuel procurement, he stressed that without a rate increase, it would not be sufficient for long-term sustainability.

Current SPUG charges date back to 2014, and NPC has been filing for annual increases over the past decade. The ERC is expected to continue hearings on the proposed new Subsidized Approved Generation Rates for SPUG areas until October.

These areas include Palawan, Mindoro, Marinduque, Catanduanes, Masbate, Romblon, and several others.

The proposed rate adjustments aim to reflect the actual cost of fuel and ensure the uninterrupted operation of SPUG plants, crucial for off-grid consumers.

ERC Chairperson Monalisa Dimalanta noted that the prices based on costs collected from off-grid consumers have not been adjusted since 2005 and 2011, with deficiencies covered by the Universal Charge for Missionary Electrification (UCME) from on-grid consumers.

Napocor supervises 278 SPUG power plants nationwide, providing vital electricity to remote communities.

The anticipated rate hike is seen as essential to maintaining and enhancing power supply reliability in these areas.