The Energy Regulatory Commission (ERC) has authorized the National Power Corp. (NPC) to increase a universal electricity charge to fund the electrification of remote and off-grid areas starting this February.
The regulator approved a total subsidy of P30.773 billion for the state-run firm’s 2026 missionary electrification program.
Consumers will now see the universal charge for missionary electrification (UCME) rise to an interim rate of P0.2763 per kilowatt-hour, representing a P0.077-per-kWh increase from the current P0.2389 per kWh.
The approved amount is lower than the P34.81 billion, or P0.3127 per kWh, originally sought by the NPC.
The UCME supports NPC operations in missionary areas and funds subsidies for private power suppliers in those regions.
This is necessary because end users in off-grid areas pay subsidized rates rather than the true cost of electricity, according to the regulator.
“The gap between the subsidized rate and the true cost over time has been widening,” ERC chairperson Francis Saturnino Juan said.
“It means the subsidy requirement to support missionary electrification in the off-grid areas has been increasing. Hence, the UCME, which is the source of this subsidy has to be increased also,” he said.
The ERC directed distribution utilities and the National Grid Corp. of the Philippines to collect the funds and remit them to the Power Sector Assets and Liabilities Management Corp. (PSALM).
PSALM will disburse the funds to the NPC at a rate of P0.2662 per kWh. The remaining P0.0101 per kWh is reserved for a cash incentive for renewable energy developers as mandated by the Renewable Energy Act of 2008.
As part of the decision, the commission approved fuel costs of P14.882 billion, a slight reduction from the NPC request for P15.3 billion.
The NPC based its requirements on a projected fuel price of P77.0692 per liter and a total diesel volume of about 198,620 kiloliters.
The regulator disallowed costs for several new electrification projects because their procurement had not yet been approved by the NPC board. The commission also set a lower fixed cost of P5.399 billion for personnel and operating expenses.
While the regulator allowed the NPC to include P751.226 million in interest charges from a 2023 Land Bank of the Philippines loan, it rejected a proposed 12-percent return on rate base totaling P1.912 billion.
The commission ruled that the NPC mandate is already sufficiently supported through the approved subsidy framework.
