Consumers in the missionary or far-flung areas are facing higher power rates because of the impact of the Tax Reform for Acceleration and Inclusion law on the power plants of National Power Corp.
“In view of the enactment of the Train law, the electricity prices will be affected since the NPC-SPUG [Small Power Utilities Group] uses diesel and bunker fuels in its power plants,” state-run Napocor said in a recent filing with the ERC.
Napocor said an increase in fuel cost was due to excise tax pursuant to the Train law.
The fuel cost will increase by P0.8293 per kilowatt-hour in 2018, P1.4815 per kWh in 2019, and P1.9919 per kWh in 2020.
The higher fuel cost would translate into an increase in the operating cost in the SPUG or missionary areas, effectively contributing to the increase in the universal charge for missionary electrification, which the main grid customers also pay along with off-grid customers.
“Hence, it is imperative to adjust the SAGR to address the impact of fuel cost due to excise tax on NPC’s operating expense in order to mitigate the impact of the Train law to main grid customers,” Napocor said.