DOE sees gov’t absorbing portion of PSALM debts

The Department of Energy will propose the absorption by the government of portion of the P139 billion in stranded debts and contract costs incurred by Power Sector Assets and Liabilities Corp.

PSALM seeks to pass on these costs to power users through the imposition of a universal charge.

Energy Undersecretary Josefina Patricia M. Asirit said this option would be among the measures to be presented to to the Joint Congressional Power Commission (JCPC) to ease the impact of the cost recovery applications of state-run PSALM on consumers.

PSALM sought the imposition of a universal charge of 36 centavo per kilowatt hour within four years to cover the payment of stranded contract costs. Another 3-centavo per kWh charge to be imposed within 15 years was proposed to settle the stranded debts.

Asirit said that under the DOE proposal, which was still being studied, the government would be allocating funds to cover portion of the universal charge. The amount can be sourced from various funds, including the royalties that the government receives from the Malampaya gas field operations off Palawan.

According to Asirit, the proposal, among other options, will be presented to the JCPC or the heads of both chambers of Congress. Earlier, PSALM said it wanted to push for the 10-year extension of its corporate life up to 2036, as another option to ease the burden on consumers who will be made to pay portion of the stranded debts and contract costs.

The extension of PSALM’s corporate life, which is scheduled to end in 2026, will allow the agency to spread over the collection of these universal charges for stranded debts and contract costs over a longer period than what the government firm had earlier proposed. Amy R. Remo