State-run National Power Corporation (NPC) has logged massive revenue shortfall of P5.0 billion from operations at its Small Power Utilities Group (SPUG) last year; and relief is nowhere in sight except for planned borrowings to plug cash gap.

In the absence yet of an updated Missionary Electrification Development Plan (MEDP) that should have been the basis for budgetary outlay for 2010 to be filed with the Energy Regulatory Commission, the state-owned power firm is left with no choice but to revert to its 2009 rate level, primarily for subsidy requirements.

Nevertheless, it was pointed out that the old SPUG rate subsidies were below the required revenue requirement of NPC, hence, the incurrence of collection deficiencies. Last year’s subsidy rate was at P0.3104 per kilowatt hour (kWh) and this was reported lower by P0.09 per kWh as compared to estimated subsidy rate of P0.40 per kWh.

NPC president Froilan A. Tampinco has hinted to media the company’s plan to tap P15 billion worth of borrowings to sustain their SPUG operations. But this is contingent on the approval to be given by the Department of Finance (DoF) since NPC’s borrowings will still be bound by sovereign guarantees.

Securing DoF’s imprimatur on guarantees is a must-do for NPC, as hinged on a Department of Justice (DoJ) Opinion issued in 2002. Following the privatization of its assets, NPC was basically hurdled from incurring new loan obligations except for the need of its SPUG areas.

Highly-placed sources indicated that NPC’s immediate cash needs would be to plug its budgetary gap; as well as settlement of the P4 billion bridge financing earlier secured from the Land Bank of the Philippines.

Without the collections shortfall, NPC can strive for a healthier budgetary balance for its SPUG operations. The scheduled borrowings may only total P17 billion for the next five years. Chunk of the power firm’s capital requirements will be for fuel and operating costs. The total capacity for SPUG areas being serviced by NPC would reach over 600 megawatts.

As far as subsidies are concerned, it was emphasized that the entry of new power providers (NPP) are not really putting in much help especially so since they are also getting their share in the subsidy allocation.

In the electric bills, there is a universal charge (UC) collected from all ratepayers for missionary electrification; and that it is being disbursed by fund administrator Power Sector Assets and Liabilities Management Corporation (PSALM), chiefly for NPC’s SPUG requirements.

Government policies cast a framework wherein the electrification of off-grid or unviable areas be sustained with subsidies so as not to shock consumers in these areas with prohibitive electricity rates.