ERC sees new missionary charge taking effect in May at earliest

THE Energy Regulatory Commission (ERC) said the application filed by the National Power Corp. (Napocor) to raise the universal charge for missionary electrification (UCME) is undergoing review, with the new charge potentially becoming effective if the review is successfully completed this month. 

“If approved by March, this will reflect in May,” ERC Chairperson and Chief Executive Officer Monalisa C. Dimalanta said during a virtual briefing on Thursday.

In January, the Department of Energy (DoE) proposed a higher UCME to compensate Napocor for higher diesel prices.

The DoE and Napocor are proposing a UCME increase of about 15 centavos per kilowatt-hour to support power generation in off-grid areas, which are typically serviced by diesel generators.

Ms. Dimalanta said that the ERC is now clearing its backlog of petitions.

“We promised Napocor that the ERC will resolve pending cases. They have at least eight cases filed; some are 10 years old. We will try to resolve at least two cases every quarter starting this March,” Ms. Dimalanta said.

If approved, Ms. Dimalanta said that the increase will be carried out on a staggered basis until it reaches 15 centavos.

“The 15-centavo hike will fund them to power our islands,” she added.

Republic Act No. 9136 or the Electric Power Industry Reform Act of 2001 authorizes the collection of UCME to fund Napocor’s operations, including those of its small power utilities group or SPUG, which serves remote areas not connected to the grid.

Separately, the ERC said the reserve market will be launched this year.

“There are still ongoing hearings regarding the pricing methodology. We hope to complete it by mid-May, hopefully by June, but maybe by the end of May we can finish it,” Ms. Dimalanta said.

“Then maybe after one or two months, the reserve market will be operationalized. Definitely, within the year,” she said.

Last month, the Independent Electricity Market Operator said it is targeting commercial operations for the reserve market by June.

The reserve market allows the trading of ancillary services or power reserves which support the transmission of capacity and energy. — Ashley Erika O. Jose