Electricity users face additional charges
STATE-RUN Power Sector Assets and Liabilities Management Corp. seeks to recover from power consumers 36 centavos per kilowatt-hour over the next four years, and a separate 3 centavos per kWh within a 15-year period to help pay the debt of another government firm, the National Power Corp.
In a statement issued Friday, PSALM said the 36 centavos per kWh it 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.
The additional collections will fall under the so-called universal charges, and will take effect once PSALM’s application is approved by the Energy Regulatory Commission.
The petition will be filed on June 28, said PSALM president and CEO Emmanuel Ledesma Jr.
PSALM hopes to collect the universal charge for stranded contract costs (UC SCC) for a longer period of 15 years, rather than the current four years set by the ERC, to ease the burden on consumers, Ledesma explained.
Should the ERC allow PSALM to recover the UC SCC for 15 years, the additional charge would be equivalent to 6 centavos per kWh.
This means that the total universal charges for both stranded contract costs and stranded debts will amount to 9 centavos per kWh over the next 15 years. It will be significantly lower than the previous application of over 30 centavos per kWh, and previous estimates of up to 15 centavos per kWh.
As a result, the total debt to be passed on to consumers will represent a significant reduction from the over P500 billion that PSALM had sought in its first four applications with the ERC.
Ledesma said the total amount of stranded debt to be recovered stood at only P66 billion.
The PSALM executive did not mention the amount for stranded contract costs.
“This significant decrease was mainly due to the substantial privatization proceeds generated by PSALM from the sale of generation assets and IPP (independent power producer) contracts to reduce Napocor’s financial obligations as mandated by the Electric Power Industry Reform Act,” Ledesma said.
