Power consumers will have to shoulder the stranded debts and contract costs of state-run National Power Corp. through the payment of a universal charge, as this would help reduce the country’s ballooning obligations, according to Power Sector Assets and Liabilities Management Corp. (PSALM).
PSALM said in a statement that even the Asian Development Bank had stressed that the collection of the universal charge was a “viable way of settling the debts of Napocor” and “must be a concerted effort of all involved agencies to considerably ease the financial obligations of the Philippine government.”
PSALM made the reiteration as it reported that it was already finalizing the amount of stranded debts and contract costs that the government would pass on to all power consumers through the imposition of this universal levy.
Although the corporation did not cite any figures, PSALM president and chief executive officer Emmanuel M. Ledesma Jr. had said that PSALM wanted to cut the amount by more than half to roughly P230 billion from the over P500 billion it had originally sought.
This is equivalent to a universal charge of about 12 to 15 centavos per kilowatt-hour (kWh) from the previous 30.49 centavos per kWh that would be collected until the end of PSALM’s corporate life by 2026.
According to Ledesma, PSALM targets to file its petitions by June 27, a few days before the June 30 deadline imposed by the Energy Regulatory Commission.
ERC will review, determine, fix and approve the final amount of UC for stranded debts and contract costs.
Stranded debts refer to Napocor’s unpaid financial obligations, which are not covered by the proceeds from the sale of its power assets. These debts exclude P200 billion worth of Napocor debt that was earlier assumed by the national government.
Stranded contract costs, meanwhile, referred to the difference between the contractual payment obligations and the revenue earned from the sale of the contracted energy for eligible independent power producers (IPPs).
Ledesma assured the public that the determination of the UC went through stringent processes involving several government agencies. PSALM, he reported, recently conducted a series of workshops aimed at educating stakeholders and partner agencies and soliciting ideas and opinions on the computation.
Sponsored by the Asian Development Bank (ADB), the workshops were attended by representatives from the Department of Finance, Napocor, Department of Energy, National Economic and Development Authority, Bangko Sentral ng Pilipinas and Department of Budget and Management.