NPC can get loans for missionary electrification

BY LENIE LECTURA – SEPTEMBER 27, 2022
from Business Mirror

THE National Power Corporation (NPC) has been cleared to borrow funds or contract loans to fulfill its missionary electrification mandate, the Department of Energy (DOE) said Monday.

DOE Secretary Raphael P.M. Lotilla said the Department of Justice (DOJ) has released a legal opinion that allows the NPC to draw on funding sources other than the Universal Charge for Missionary Electrification (UCME) to fulfill its mandate of energizing areas in the country which are not connected to the main grid and ensure a stable and reliable power supply in these areas.

“The favorable Opinion will allow the NPC to establish a credit line with local banks that would enable it to manage the fuel price increase that has significantly affected the NPC’s financial position. The funds of NPC sourced from the UCME is not sufficient to support NPC’s current operation,” said Lotilla.

In its Opinion No. 20 Series of 2022 dated September 23, 2022, the DOJ indicated that the NPC has the legal authority to borrow funds or contract loans to fulfill its missionary electrification function in the off-grid areas pursuant to its Charter and the mandate established under Section 70 of Republic Act No. 9136 or the Electric Power Industry Reform Act of 2001 (EPIRA).

Section 70 of the EPIRA states that NPC shall remain as a National Government-owned and-controlled corporation to perform the missionary electrification function through the Small Power Utilities Group (SPUG) and shall be responsible for providing power generation and its associated power delivery systems in areas that are not connected to the transmission system.

NPC-SPUG currently supplies 229 missionary areas throughout the Philippines, most of which have yet to attain a 24-hour electric power service.

“We express our appreciation to the DOJ for this very timely news. We are also grateful for the support of the entire NPC Board, particularly the Department of Finance as Chairman, the Departments of Budget and Management, Agriculture, Environment and Natural Resources, Interior and Local Government, Trade and Industry, and the National Economic and Development Authority as members,” Lotilla said.

The favorable decision will not only ensure timely payments to NPC’s New Power Providers but also enable the NPC, after two decades, to ramp up renewable energy sources in the off-grid areas and improve island-wide transmission in the major off-grid islands, particularly through Public-Private Partnership arrangements.