GOVERNMENT-RUN National Power Corp. (Napocor) expressed optimism its overall rates would not increase as much until next year amid a number of pending petition including generation—rate adjustment mechanism (GRAM), incremental currency-exchange rate adjustment (Icera), as well as its petition to increase it basic generation rate by P0.3685 per kilowatt-hour (kWh) to P4.26/kWh.

“We expect the Energy Regulatory Commission [ERC] to issue its decision on a number of petitions we have filed with them. However, whatever increase in basic rate charges that would be decide upon by the ERC would also be offset by expected reductions owing to our GRAM and Icera petitions,” said Cyril   del Callar, Napocor president, in a press conference Friday.

The Napocor head said when all the six petitions filed by Napocor are resolved by the commission, Napocor’s rates will still be kept at its June 2008 level and is even seen to be sustained until 2009.

“Before the end of the year, we hope the price levels in Luzon, where diesel and bunker-fired power plants are being used, should be relatively close to the real cost of power,” said del Callar, adding that Napocor expects the level in June 2008 of P4.11/kWh to be the average for the rest of the year.  He added that any price adjustments will be mitigated or offset by Napocor’s GRAM and Icera petitions pending with the ERC.

Whatever rate is seen in June, according to del Callar, is what they to see until the end of the year and up to next year.

“It [power rates] will be about P4.11/kWh, based on the annual average that will not be far from the P4.11 or P4.20 we applied for, but I cannot give any specific rate since prices change every month. Our GRAM and Icera petitions are all combined, and my benchmark generation rate is P3.89/kWh,” he said.

Del Callar said the application for basic rate adjustment was just meant to update its rate base given recent developments on the privatization of its power plants.

“So even if you increase the basic generation rate, it is still not cast in stone owing to either an increase or reductions from GRAM/Icera adjustments, and the ideal situation is that there would be offsetting,” del Callar added.

The last reference in Napocor’s basic rate increases in 2004 and 2005 was 2002, thus, del Callar cited the need to update its benchmarks to the 2007 level.

Meanwhile, Bagong Alyansang Makabyan (Bayan) assailed Napocor for its pending petitions to increase generation rates in Luzon.

Bayan secretary general Renato Reyes Jr. called the move “patently unjustified” given recent allegations of overpriced coal purchases involving Napocor.  He pointed out that Napocor justified the increase as a result of the privatization of its assets.

“It’s like rubbing salt on an open wound. They haven’t even explained the alleged overpriced coal they bought last year, and this year, now they want a rate hike. That is totally unacceptable. They shouldn’t be given any increase, not one cent,” Reyes said. 

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