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NPC to lower electricity costs
By J.Lo
“Look for ways to reduce UCME…. I know that hybridization is one and connecting to grid could be another,” Sen. Sherwin Gatchalian told NPC officials National Power Corp (NPC) should work to reduce universal charge for missionary electrification (UCME) subsidy to possibly bring down electricity rates for consumers connected to main transmission grid.
During recent Senate hearing on proposed budget of NPC, Gatchalian said government-owned and controlled corporation is mandated by law to energize far-flung, off-grid areas and islands in the country.
UCME is used to subsidize more expensive cost of providing electricity in off-grid areas.
“I’m very optimistic that one day, benefit of hybridization and rationalization of UCME would translate to lower subsidy,” senator said.
Gatchalian, vice-chair of Senate committee on energy, however, noted that UCME subsidy has steadily increased over the years, from P7.34 billion in 2015 to P24.62 billion in 2024.
At present, NPC is pushing to accelerate hybridization of its small power utilities group diesel power plants using renewable energy resources.
NPC officials said hybridization lowers cost of energy by P2 to P3 per kilowatt hour.
NPC said with completion of hybridization for 16 projects, power firm expects to generate up to P1.3 billion in savings from fuel costs by 2025.
NPC, however, accounts for only 30 percent of energy supply in missionary areas, while 70 percent is provided by new power providers (NPPs).
“How do we convince NPPs, account for 70 percent, to hybridize…I understand they have supply contracts, so we should explore possibility of incentivizing or compelling them, if necessary, to hybridize… UCME subsidy is steadily increasing,” Gatchalian said.
At the same time, the senator urged NPC to pursue rationalization study of UCME that Department of Energy has conducted.
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