State-owned Power Sector Assets and Liabilities Management Corp. (PSALM) is seeking to collect more than P5 billion from all power consumers in Luzon and Visayas to recover fuel, power and foreign exchange related costs incurred in operating government-owned power plants.
This, however, will jack up the power generation rates of National Power Corp. by 10.59 centavos per kilowatt-hour in Luzon and 11.57 per kwh in the Visayas over the next five years, according to the application filed by PSALM with the Energy Regulatory Commission.
Power consumers in Mindanao, in the meantime, will get some relief as PSALM plans to refund consumers a total of P858 million, equivalent to 2.58 centavos per kWh every month over the next five years.
PSALM stressed that the approval of this latest application, which covered the billing period of March 2010 to February 2011, was necessary to “improve its financial standing, allowing it to efficiently comply with its mandate under the Electric Power Industry Reform Act to liquidate all of Napocor’s financial obligations and stranded contract costs in an optimal manner.”
As of end-2010, Napocor’s obligations were placed at $15.8 billion.
The government, through PSALM, has been trying to bring down these debts but was having a hard time doing so, with Napocor still managing and operating the remaining government-owned power plants and contracted capacities from the independent power producers. These facilities and contracts have yet to be privatized or sold and turned over to the private sector.
Among the measures being implemented by PSALM were the implementation of a liability management program, the sale of the remaining state-owned power assets and contracted capacities, and the recovery of at least P140 billion worth of contract costs of stranded debts from power consumers through the imposition of a universal charge.
At present, the petition to collect the entire P140 billion is pending at the ERC.
Under a petition filed last June, PSALM wanted to collect from power consumers 36 centavos per kWh over the next four years, and a separate 3 centavos per kWh over 15 years.
The 36 centavos per kWh that PSALM wanted to pass on to consumers would cover the payment of stranded contract costs, while the 3 centavos per kWh would be used to settle stranded debts.