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ERC rejects new power rate hike bid

PSALM petition to recover P65B in ‘stranded’ debts

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Consumers can heave a sigh of relief as the Energy Regulatory Commission rejected the petition of the state-run Power Sector Assets and Liabilities Management Corp. (PSALM) to collect another P65 billion worth of so-called stranded debts.

“This means that no additional universal charge will be imposed on top of the universal charge for stranded contract costs, which was recently fixed at 19.38 centavos per kilowatt-hour,” the ERC said in a statement issued Wednesday.

On Tuesday, the ERC ruled that PSALM could collect a total of P53.58 billion from all power consumers through a new component in electricity bills to be called universal charge for stranded contract costs (UC-SCC).

According to the ERC, it denied the petition of PSALM to recover P65 billion worth of stranded debts and collect 3.13 centavos a kWh over a 15-year period through another universal charge.

Based on the affected parties’ submissions and records of the case, the ERC ruled that certain expenditure items—including the proposed operating expenses for National Transmission Corp. and the projected capital expenditures for the rehabilitation of the remaining hydropower plants of the state-run National Power Corp.—should not be recovered through the proposed universal charge for stranded debts.

After excluding these items, the ERC concluded that “no stranded debts will be incurred.”

Stranded debts refer to any unpaid financial obligations of Napocor that have not been covered by the proceeds from the sale of its power assets. These debts already excluded P200 billion worth of Napocor debt that was earlier assumed by the national government.

PSALM, however, will be allowed to submit annual “true-up applications” on or before March 15 of each year to seek the recovery of what it deemed as stranded debts through the universal charge collection.

Meanwhile, ERC executive director Francis Saturnino Juan said in a phone interview on Wednesday that PSALM could also file a motion for reconsideration should it want to push for the collection of the universal charge for stranded debts (UC-SD). The appeal, if any, would similarly be subjected to ERC proceedings.

PSALM president and CEO Emmanuel Ledesma Jr. declined to comment on the ERC ruling and on what steps the agency planned to undertake. “We are still discussing internally what are our next steps [will be],” Ledesma said in a text message.


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Tags: Consumer Issues , electricity , energy regulatory commission , Power Rate Hike , Power Sector Assets and Liabilities Management Corp. (PSALM)

  • Viciel

    What does ERC think it has done, served the public interest?  Oh no, this is very obvious -this actually means more leg room for the private energy companies to raise their rates.  Let’s go back and recall what really happened.  PSALM sold the NAPOCOR power plants  to private investors at market values, i.e., $M/1 MW generating power.  PSALM is left with unrecovered cost of the plants, most likely overpricing in the past, and they want these losses passed on to the consumers.  Of course, ERC will reject this because that would raise the rates and private energy companies will be left with very little room to maneuver their own rate increase.  This is an old Divisoria trick – sell one item at a very low price to make the buyer think the prices are really low, then hit him high on the next items.

  • parefrank

    There is only one solution. Nullify that contracts and let the IPPs  work at normal business conditions. Means make profit or losses at their own expenses. Who else is paid, no matter his product is needed or not? And scrap the isiotic rule that  a 12% profit is guaranteed. Look at foreign big companies like in Europe, they are happy and grow with much less net profit. But they have not fundreds of high paid presidents, vice presidents, directors, vice directors and other high managing people.
    In RP, all is made for to milk the customers and let them pay for costs they have nothing to do with and can not control them. In which other business you can, like Napocor or PLDT, let the consumer pay for credit cost of the ownership? If a business is created with loans and the customers have to pay the loans, then the customers own the business because they repay the loans. Here, such business is started solely with credits, the customers repay the credits (and more than one time) plus pay the interests, but they are never the owners. It is not only unfair, it is already criminal. It is a rule which says “all profits to the company and all risks and losses to the customers”.

  • http://twitter.com/JOSE__RIZAL JOSE RIZAL

    Indeed, the PPP Contract for the oligarchs and its corresponding margin, as power producers, are secured.  Everthing is being borne by the citizenry.  Manufacturering company who needs more energy can impute the rate as a product cost.  Hahahahahahahaha!
    Nasaan na ang planong pang-enerhiya ni Simeon? Kasalukuyang itinatayo ng mga oligarchs are coal powered plants, dinagdagan lang ng “clean”.  Magkano ang per diem ni Simeon sa mga ito, after the presidency, gayong mga oligarchs sa panahon ni Cory ang nag-ienjoy sa pag-invest sa siguradong kikita na negosyo, ang enerhiya.  Lahat ng safety nets para sa secured margin ay yari na.  Mamamayan ang palaging lugi sa pagtataas ng presyo ng kuryente.  Dapat sa susunod na election na presidential, may matinong taong magsimula na amiendahan ang Cory Constitution.  Nasa 2013 na tayo, pero, style Cory at oligarchiya pa rin ang panalo.  Talo pa rin si Juan sa kanyang karapatang makalasap ng resonabling presyo ng basic needs…na binenta at pini-presyohan sa kasalukuyan ng mga oligarchiya.
    May utak ba ang namumuno ngayon, o, bayad utang lang ni Simeon sa nagpi-finance ng kanyang kandidatora?
    Hahahahahahahahaha!
     

  • http://profile.yahoo.com/AND7MQ5FERICDOIAUW56RYT45A tower_of_power

    Ibenenta ninyo ang mga planta ant mga transmission lines and related equipment, hindi ninyo pinagusapan ang mga utang? What STUPID GOVERNMENT NEGOTIATORS!!!! DAPAT IKULONG YANG MGA PUMIRMA SA CONTRATA!!!!  MUKHA YATANG HALOS PINAMIGAY NA LANG NINYO ANG MGA ARIARIAN NG MAMAYAMANG FILIPINO!!!! TAPOS NGAYON ANG MGA ELECTRICITY CONSUMERS PA ANG PABABAYARIN NINYO? ISA ETONG KALAPASTANGAN NA HINDI DAPAT PALAGPASIN NG MGA MAMAMAYAN!!!!

  • mr dt

    We sell SOLAR POWERED WINDOW AIRCON FOR US$ 3500 in the PHILIPPINE ISLANDS

    INTERESTED  email us at  sabahphilippines at gmail com

    • parefrank

      Wow, it means about 70% profit compared to original and competing prices. 



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