THE Energy Regulatory Commission (ERC) has deferred ruling on National Power Corp. (NPC) petitions regarding the universal charge for missionary electrification (UCME), citing the need for further evaluation, saying that a resolution is expected within the first quarter.
“Given the pending issues that need to be resolved, the matter has been deferred for further deliberation,” the ERC said in a document posted on its website.
NPC has filed several applications with the ERC to tap the UCME to offset the shortfall in the missionary electrification subsidy. The applications cover various periods between 2015 and 2022.
As authorized by the Electric Power Industry Reform Act or EPIRA, the UCME is a monthly charge collected from on-grid electricity end-users to subsidize the cost of power in off-grid areas.
ERC Chairperson and Chief Executive Officer Monalisa C. Dimalanta said that the commission deferred a decision to address outstanding questions.
“We expect them to come back to us soon so we can resolve this within the first quarter,” Ms. Dimalanta said via Viber.
She said that among the items that need to be addressed is whether or not NPC is entitled to receive a 12% return on rate base (RORB) on top of its cost recovery for missionary electrification. The RORB is the recovery of reasonable costs to enable an entity to operate viably.
“The Commission had previously denied this claim, given that UCME is already a subsidy provided by end-users, but NPC asked for reconsideration,” she said.
“NPC’s position is that the EPIRA did not repeal the provision in their charter as regards RORB. So their claim is that as a rule they are still entitled to RORB every year,” she added. — Sheldeen Joy Talavera