Power providers in Palawan have been assured that the National Power Corporation (NPC) will pay their outstanding subsidy charges, allowing them to continue operating to produce electricity.
This was clarified recently by the Palawan Electric Cooperative (PALECO) as Delta P, one of their major power suppliers, earlier backtracked from its initial plan to shut down by the end of September due to financial constraints.
PALECO officer-in-charge Neriza Regal said that apart from Delta P, two other power providers are expected to receive partial payments for the Universal Charge on Missionary Electrification (UCME) subsidy, noting that the government had allowed the NPC to seek a loan in order to keep up with its payments.
Rising fuel costs have strained the NPC’s budgetary capacity to support the UCME subsidy to Palawan and similar island grids throughout the country.
NPC has already paid Delta P P68 million of the unpaid UCME subsidy of P440 million. It covers only one month of the unpaid UCME subsidy to Delta P since the month of March, according to PALECO. NPC has a total of P2 billion unpaid UCME to DMCI and around P300 million to PPGI.
“As to the remaining two providers, we are yet to receive news from them, but hopefully they will be paid na partially by NPC because government ordered NAPOCOR to secure loans for immediate payment,” Regal said in a press conference Tuesday.
The three power providers all wrote to the electric cooperative to express their concerns about the unpaid UCME subsidy, with Delta P announcing its intention to cease operations supposedly by end of September.
With 20 megawatts (MW), Delta P is PALECO’s largest load provider, and its absence may result in long rotational power interruptions, according to PALECO’S corporate planning manager Peter Vincent Mendoza. PALECO also granted Delta P’s request to reduce its dispatch during off-peak hours in order to extend its fuel capacity.
“Medyo manipis na ang supply natin, kapag nawala pa ang mga planta ni Delta P ay talagang magkakaroon tayo ng problema sa supply situation natin. Magkakaroon talaga ng mahabang rotational power interruptions,” Mendoza said.
NPC previously explained that its unpaid UCME subsidies were caused by concerns about rising fuel and power providers’ operating costs. Mendoza reiterated NPC’s claim that their budget only allows for P35 per liter, but power providers charge them P75 per liter.
To aid the unpaid UCME subsidies, the Department of Energy (DOE) also supported the opinion of the Department of Justice (Opinion No. 20 Series of 2022) on September 23, indicating that NPC has the legal authority to borrow funds or contract loans to fulfill its missionary electrification function.
DOE Sec. Raphael Lotilla stated that allowing NPC to establish a credit line with local banks that would enable NPC to manage the fuel price increase that has significantly affected its financial position. The funds of NPC from the UCME are not sufficient to support NPC’s current operation, he added.
The UCME for the small power utilities group (SPUG) areas that include Palawan is P0.1561 per kWh.