Napocor’s power economy department manager Urbano Mendiola said the increase is urgent to stop the agency’s financial bleeding.
The increase will be about P1.77 in the Visayas, he said.
Under the RORB scheme, power will be more expensive during peak hours (around 5 to 10 p.m.) and cheaper in off-peak hours. The scheme will convince consumers, especially industries, to schedule their operations on off-peak hours to save on electricity.
"It is during peak hours that we operate the very expensive land-based (diesel) turbines because this is when our reserves are thin," Mendiola explained.
In its petition, Napocor said it was applying for new generation charges based on RORB methodology.
It had filed for new rates based on long-run avoidable cost, but was opposed on grounds that its charter only allows return on rate base methodology.
Napocor said that had the long-run avoidable cost been used as basis for generation charges, the rates would have been lower than what is being asked now. This is because the long-run avoidable cost is based on the cost of producing electricity with the most efficient power plant.
Napocor’s generation rates, which it charges to power distributors such as the Visayan Electric Company Inc. are passed on to the end-users like households or residential users, commercial and industrial users.
Mendiola said the government-owned corporation was losing so much because the price of the power it was selling was not reflective of the true cost of generation.
NPC is currently saddled with a 500-billion-peso debt.
But consumer groups Freedom from Debt Coalition and the Konsumo Cebu are skeptical the government-run utility firm is losing. "We have to know what are the reasons for such losses, if indeed it is true, whether it is because of inefficiency or the true costs of electricity are not charged," said FDC secretary-general Lito Vasquez.
NPC supplies power to distribution companies such as the Visayan Electric Co. (Veco) and Cebu Electric Cooperative.
Veco and NPC could not give an estimate on how much of the increase would be passed on to consumers since NPC only supplies 150 MW of the 260-MW daily demand of Veco.
The ERC will move to Davao to conduct another public hearing on the matter for the Mindanao increases sought by NPC.
Consumers from Leyte also opposed the petition Wednesday, asking why they would get an increase when they have vast supplies of power from the Tongonan geothermal field in Ormoc City.
