The Energy Regulatory Commission has allowed state run Power Sector Assets and Liabilities Management (PSALM) Corp. to set to zero its monthly fuel, purchased power and foreign exchange-related cost adjustments, known collectively as Automatic Cost Adjustments (ACA).
This decision, which will be effective starting the June 2016 billing period, will help cut the costs of electricity for PSALM customers, namely electric cooperatives, private utilities, industries, and government agencies.
These customers source their electricity requirements from PSALM under a “contract for the supply of electric energy.”
“With the ERC approval to set the ACA to zero, PSALM has effectively reduced the cost of electricity of its power customers as the fuel, purchased power and foreign exchange-related charges will no longer form part of PSALM’s power bills,” PSALM officer-in-charge Lourdes S. Alzona said in a statement on Monday.
“The impact of this ERC approval will be greatly felt by power customers in Mindanao where PSALM still has 49 existing power contracts,” Alzona added.
PSALM explained that the move to set ACA to zero stemmed from the agency’s efforts to privatize the government’s fuel-based generating assets and independent power producers (IPP) plant contracts.
Its privatization program had significantly lessened PSALM’s operational costs, thus warranting the setting of the ACA to zero.
“To extend the benefits of the privatization program to PSALM’s customers, PSALM filed the omnibus motion before the ERC,” Alzona said.
ERC’s ruling on the motion of PSALM found its basis on ERC Resolution No.19, series of 2009 which provides that “where there is good cause, ERC may allow an exemption from any of the provisions, if such is found to be in the public interest and is not contrary to law or any other related rules and regulations.”