Gatchalian Urges NPC To Endeavor To Reduce UCME Subsidy To Lower Electricity Costs

(MENAFN- EIN Presswire) PHILIPPINES, October 20 - Press Release
October 20, 2024

Gatchalian urges NPC to endeavor to reduce UCME subsidy to lower electricity costs

Senator Win Gatchalian said that the National Power Corporation (NPC) should endeavor to reduce the universal charge for missionary electrification (UCME) subsidy to possibly bring down electricity rates for consumers connected to the main transmission grid.

"Look for ways to reduce UCME. I know that hybridization is one and connecting to the grid could be another," Gatchalian told NPC officials during a recent Senate hearing on the proposed budget of the NPC, which is mandated by law to energize far-flung, off-grid areas, and islands in the country.

UCME is used to subsidize the more expensive cost of providing electricity in off-grid areas.

The vice-chair of the Senate Committee on Energy, however, noted that the UCME subsidy has steadily increased over the years, from P7.34 billion in 2015 to P24.62 billion in 2024.

Currently, NPC is pushing to accelerate the hybridization of its Small Power Utilities Group (SPUG) diesel power plants using renewable energy resources.

According to the NPC, hybridization lowers the cost of energy by 2 to 3 pesos per kilowatt hour. The NPC said that with the completion of hybridization for 16 projects, the NPC expects to generate up to P1.3 billion in savings from fuel costs by 2025. The NPC, however, accounts for only 30% of the energy supply in missionary areas, while 70% is provided by new power providers (NPPs).

"How do we convince the NPPs, which account for 70%, to hybridize? I understand they have supply contracts, so we should explore the possibility of incentivizing or compelling them, if necessary, to hybridize. The UCME subsidy is steadily increasing," the senator said. At the same time, Gatchalian urged the NPC to pursue a rationalization study of the UCME that the DOE has conducted.

"I am not suggesting that we impose the true cost of energy because if you do that, it might discourage business establishments, and they might leave and cause massive unemployment. But we need to find the right balance," he said.

According to the DOE, the islands of Palawan and Mindoro account for about 60% of the UCME subsidy.

"I'm very optimistic that one day, the benefit of hybridization and rationalization of the UCME would translate to lower subsidy," he added.

Gatchalian sa NPC: Sikaping bawasan ang UCME subsidy para mapababa ang singil sa kuryente

Sinabi ni Senador Win Gatchalian na dapat pagsikapan ng National Power Corporation (NPC) na bawasan ang universal charge for missionary electrification (UCME) subsidy para posibleng mapababa ang singil sa kuryente ng mga konsyumer na konektado sa main transmission grid.

Ginagamit ang UCME para ma-subsidize ang mas mahal na halaga ng pagbibigay ng kuryente sa mga off-grid na lugar o 'yung hindi konektado sa grid.

Pero ang nakakabahala, ayon sa vice-chair ng Senate Committee on Energy, ay ang patuloy na pagtaas ng UCME subsidy sa mga nakaraang taon -- P7.34 bilyon noong 2015 hanggang P24.62 bilyon nitong 2024.

"Maghanap ng ibang mga paraan para mabawasan ang UCME. Isa na dito ang hybridization at isa din ang pagkonekta sa main grid," sabi ni Gatchalian sa mga opisyal ng NPC sa nagdaang pagdinig ng Senado sa panukalang pondo ng NPC. Ang NPC ay inatasan ng batas na magbigay ng kuryente sa mga malalayong lugar, off-grid areas, at mga isla sa bansa.

Sa kasalukuyan, isinusulong ng NPC na pabilisin ang hybridization ng Small Power Utilities Group (SPUG) na mga diesel power plant nito gamit ang renewable energy resources. Ang hybridization ay ang kombinasyon ng iba't ibang sources of energy.

Ayon sa NPC, pinapababa ng hybridization ang halaga ng enerhiya ng 2 hanggang 3 piso kada kilowatt hour. Sabi pa ng NPC, sa pagtatapos ng hybridization para sa 16 na proyekto, inaasahan nito na makalikom ng hanggang P1.3 bilyon na savings mula sa gastos sa gasolina pagdating ng 2025. Gayunpaman, 30% lamang ang suplay na nanggagaling sa NPC para sa tinatawag na missionary areas o mga liblib at malalayong lugar. Samantala, 70% ng suplay ay nanggagaling sa new power providers (NPP).

"Paano natin kukumbinsihin ang mga NPP na sumailalim na rin sa hybridization? Naiintindihan ko na mayroon silang mga kontrata sa suplay kaya pag-isipan natin ang posibilidad ng pagbibigay ng insentibo para mahikayat sila, kung kinakailangan na mag-hybridize. Ang UCME subsidy ay patuloy na tumataas," ayon sa senador. Kasabay nito, hinimok ni Gatchalian ang NPC na ituloy ang rationalization study ng UCME na isinagawa ng DOE.

Ayon sa DOE, nasa 60% ng UCME subsidy ang mga isla ng Palawan at Mindoro.

"Kumpiyansa ako na balang araw, ang benepisyo ng hybridization at rationalization ng UCME ay magreresulta sa mas mababang subsidy," dagdag niya.

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