MANILA, (PIA) — Senator Win Gatchalian has called on the National Power Corporation (NPC) to explore ways to reduce the universal charge for missionary electrification (UCME) in an effort to lower electricity rates for consumers connected to the main transmission grid.
During a recent Senate hearing on NPC’s proposed budget, Gatchalian emphasized the need for cost-reduction strategies, highlighting hybridization and grid connections as potential solutions.
“Look for ways to reduce UCME. I know that hybridization is one and connecting to the grid could be another,” he said.
The UCME is a subsidy designed to offset the higher costs of providing electricity in off-grid areas.
However, Gatchalian noted that the subsidy has seen a significant increase over the years, growing from P7.34 billion in 2015 to a projected P24.62 billion in 2024.
Currently, the NPC is working to accelerate the hybridization of its Small Power Utilities Group (SPUG) diesel power plants by integrating renewable energy sources. According to NPC officials, hybridization can lower energy costs by 2 to 3 pesos per kilowatt-hour.
With the completion of 16 hybridization projects, the NPC expects to save up to P1.3 billion in fuel costs by 2025.
However, Gatchalian pointed out that the NPC 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,” he said.
The senator also urged the NPC to conduct a rationalization study of the UCME, a study previously undertaken by the Department of Energy (DOE).
He expressed concern about the impact of high energy costs on businesses, noting, “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.”
According to the DOE, the islands of Palawan and Mindoro are significant contributors to the UCME subsidy, accounting for about 60% of the total.
“I’m very optimistic that one day, the benefit of hybridization and rationalization of the UCME would translate to lower subsidy,” Gatchalian added, signaling hope for more affordable energy in the future. (JCO/PIA-NCR)
