THE ENERGY sector has incurred a staggering P932 billion in outstanding and contingent liabilities, more than half of which would likely be shouldered by electricity consumers.

Energy Secretary Jose Rene D. Almendras told members of the House energy committee yesterday that the liabilities were those incurred by state-run firms Power Sector Assets and Liabilities Management Corp. (PSALM), National Power Corp. (Napocor) and National Transmission Corp. (Transco).

Of the P932 billion, PSALM?s total liabilities accounted for the bulk at P785.09 billion, followed by Napocor with P47.97 billion, and Transco, P99.15 billion.

Of the total, P765.12 billion accounted for outstanding liabilities while the remaining P167.09 billion were classified as contingent liabilities, or obligations guaranteed by the national government.

?The reason why I want to look at contingent liabilities is we?re trying to do balance sheet engineering so we can project the potential payments we need to cover,? Almendras explained.

The energy chief was quick to assure the public that consumers would not be forced to pay for those liabilities.

?We?re not allowed to recover all of them through the universal charge, that means the government will have to borrow and will have to pay for it through budget allocations,? Almendras said.

PSALM has already filed before the Energy Regulatory Commission a petition to recover more than P500 billion in stranded debts and contract costs through the imposition of the universal charge in the consumers? power bills.

Stranded debt refers to an unpaid financial obligation of Napocor that was not covered by the proceeds from the sale of its power assets. The estimated stranded cost of an eligible contract is calculated every year as the difference between the contractual payment obligation and the revenue earned from the sale of the contracted energy.

Almendras is proposing to stretch the payments of these liabilities to as long as 25 years from the current proposal of 18 years.

?Can you imagine more than $20 billion in 18 years? It?s not possible. My view is 25 years [to pay the liabilities by the public through universal charges and by the government]. Can you imagine the amount of strain you will put on the national budget if [we] have to pay more than $2 billion in five years? That?s going to eat up on your debt caps,? Almendras explained.

Compounding this is the fact that Napocor has been barred by the Supreme Court to conduct borrowing activities, Almendras pointed out.

He said that they might either tap PSALM for more borrowings or the government could borrow from multilateral agencies.

So far, however, all talks have been limited at the Department of Finance level. The government has yet to make proposals to multilateral agencies like the World Bank.