Residents of Mindoro and other off-grid island provinces could see their electricity costs fall as the government-run National Power Corporation (Napocor) accelerates a shift away from expensive diesel-fired generation toward renewable energy sources.

Napocor president and CEO Jericho Nograles said Monday the utility’s top priority is reducing reliance on diesel fuel, which currently powers the majority of generation facilities in areas not connected to the main grid.

“The instruction is to decrease dependence on diesel fuel because diesel power plants are basically the majority of the Napocor generation facilities,” Nograles told reporters.

Diesel-generated electricity costs about P30 pesos per kilowatt-hour on average, but consumers pay only around P7 pesos per kWh, forcing the government to absorb the subsidy gap through billions in annual appropriations.

Nograles, who assumed office last month, said Napocor is overhauling its previously slow-moving renewable energy strategy and expects visible results within six months.

The utility currently operates over 200 power plants and manages transmission systems for several island provinces including Palawan, Catanduanes, Masbate, Marinduque and Mindoro.

Under the Electric Power Industry Reform Act (EPIRA law), Napocor is mandated to provide electricity and associated power delivery systems to areas not connected to the country’s main transmission grid, which is operated by the National Grid Corporation of the Philippines (NGCP).

While NGCP manages the backbone transmission network linking Luzon, Visayas and mainland Mindanao, Napocor remains responsible for power generation and mini-grid systems in geographically isolated areas where grid connection is not yet feasible or economically viable.

The cost burden on Mindoro residents could be further eased once the Batangas-Mindoro Interconnection Project becomes operational, allowing the island province to draw power from the more competitive Luzon grid rather than relying solely on Mindoro-based diesel generation.

NGCP is seeking regulatory approval for the P90.66-billion peso transmission project, which will connect Mindoro to the main grid through submarine cables and overhead transmission lines from Batangas.

Once completed, the interconnection is expected to reduce the universal charge for missionary electrification collected from electricity consumers by 20 percent, according to NGCP officials.

Current electricity rates in Mindoro (served by ORMECO and OMECO) range from P14 to P15 pesos per kWh, notably higher than rates in grid-connected areas of Luzon.

Connection to the main grid would give Mindoro access to more reliable and competitive generation sources.

Napocor is reportedly working with the Department of Energy (DOE) to deploy new technologies aimed at reducing diesel consumption in off-grid areas, potentially lowering both generation costs and government subsidies while expanding access to cleaner energy sources.