The Department of Justice issued an opinion allowing state-run National Power Corp. to draw on other funding sources aside from the universal charge for missionary electrification.
Energy Secretary Raphael Lotilla said the favorable ruling would help NPC fulfill its mandate of energizing the areas in the country that are not connected to the main grid, and ensure a stable and reliable power supply.
The DOJ issued Opinion No. 20 Series of 2022 on Sept. 23 giving NPC the legal authority to borrow funds or contract loans to fulfill its missionary electrification function in the off-grid areas under its Charter and the mandate established under Section 70 of Republic Act No. 9136 or the Electric Power Industry Reform Act of 2001.
Section 70 of the EPIRA gives NPC the mandate to perform the missionary electrification function through the Small Power Utilities Group and provide power generation and associated power delivery systems in areas that are not connected to the transmission system.
The DOE said NPC-SPUG is now supplying 229 missionary areas throughout the Philippines, most of which have yet to attain a 24-hour electric power service.
“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,” Lotilla said.
“The funds of NPC sourced from the UCME are not sufficient to support NPC’s current operation,” he said.
He said the move is part of the efforts of NPC’s board and management to ensure timely payments to new power providers.
Lotilla said the favorable DOJ opinion would finally 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 through public-private partnership arrangements.