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Higher power rates loom in early ’13

PSALM may start collecting P140B in stranded debts


The state-run Power Sector Assets and Liabilities Management Corp. expects to start collecting the P140 billion worth of universal charges for stranded debts and contract costs from all grid-connected power consumers early next year.

This followed reports that the Energy Regulatory Commission might release by January 2013 the much-awaited decision regarding PSALM’s application to collect the universal charge (UC), according to PSALM president Emmanuel Ledesma Jr.

Should PSALM’s application be approved, consumers can expect to pay another 36 centavos a kilowatt-hour over the next four years and a separate 3 centavos a kWh over a 15-year period to help pay the debt of another cash-strapped government firm, National Power Corp. (Napocor).

The 36 centavos a kWh that PSALM wanted to pass on to consumers would cover the payment of “stranded contract costs,” while the 3 centavos a kWh would be used to settle “stranded debts.” With the 39 centavos a kWh from the universal charge, PSALM will be able to collect about 25 billion a year to help settle its outstanding obligations.

PSALM, however, is hoping to collect the universal charge for stranded contract costs (UC-SCC) for a longer period of 15 years, instead of the current four years set by the ERC, to ease the burden on consumers.

Should the ERC allow PSALM to recover the universal charge for 15 years, the additional increase would be equivalent to 6 centavos a kWh. This means that the total universal charges for both stranded contract costs and stranded debts will amount to 9 centavos a kWh over the next 15 years. At 9 centavos a kWh, PSALM will be able to collect an additional P5 billion from consumers annually.

According to Ledesma, PSALM also wanted to extend its corporate life by another 10 years as this would further reduce the universal charge burden to about 6.5 centavos to 7 centavos a kWh over a longer period.

“Extending the corporate life of PSALM is not necessary but it would be nice because we’re trying to mitigate the impact to the consumers—it will be for the benefit of the consumer,” Ledesma stressed.

PSALM has been seeking to extend its corporate life to 2036, intended only to mitigate the impact of the collection of the P140 billion in universal charges on all power consumers.

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Tags: electricity , high power rates , Power consumers , Power Sector Assets and Liabilities Management Corp. , PSALM

  • kismaytami

    Saan napunta yung mga pinagbentahan ng mga power plant???

  • http://pulse.yahoo.com/_QZZKXPEA67I7HELEIYM35QVYFA Jon

    Dagdag pasakit nanaman para kay Juan de la Cruz.
    Akala ko ba sabi na gumagaan na ang buhay ng Pilipino ngayon? 

  • rodben


  • rudy_boy

    “Extending the corporate life of PSALM is not necessary . PERIOD

     Ang problema sa NAPOCOR nuon kahit nalulugi na, ayaw pa rin itaas ang
    singil ng kuryente.

     Dahil Political Decision , nag papapogi at nag papaganda lang ang mga
    previous Philippine Presidents during their tenure.Walang pakilalam sa long
    term solution.

     Bandang huli, ganun din babayaran din ng mga Pilipino, mi dagdag pang interest.

     Yan ang problema sa one term ( 6 years ) na Presidente term. Kung gusto
    magpapogi, I deferred ang problema ipasa na lang sa susunod na  President.
    Mas maganda 4 years, with another 4 years for re-election, Pag palpak, 4 years ( 1 term pa lang ), palitan na natin.

  • pinoypower

    There can be no sustainable economic development if the cost of electricity keep on rising.
    PSALM failed to contain the rise of electricity and therefore must not be given extension to its corporate life.
    The electricity power sector should be privatized fully. Napocor together with its massive debts should be closed and liquidated. 

  • pinoypower

    What exactly are stranded debts and stranded contract costs? Are these the result of corruptions and mismanagement of Napocor in the past? Or are these the results of disadvantageous contracts entered by the government in building and rehablitating power plants? Why is it that despite allegations of abuses, nobody is prosecuted and instead the public is being made to pay for the massive losses or debts?

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