New lease on PSALM life sought

Energy Secretary Jose Rene D. Almendras has urged Congress anew to extend the corporate life of state-run Power Sector Assets and Liabilities Management Corp. by another 10 years to further ease the impact of collecting the debt of power consumers worth over P140 billion.

“I am asking Congress for an extension of 10 years so that the universal charges to be imposed on power consumers will be less than 10 centavos per kilowatt-hour,” Almendras said in an interview.

In an application it filed earlier with the Energy Regulatory Commission, PSALM sought to recover from all power consumers 36 centavos per kilowatt-hour over a four-year period to cover the payment of stranded contract costs, apart from a 3-centavo per kWh collection over a 15-year period to settle stranded debts. These will be reflected as universal charges in a consumer’s monthly power bill.

The extension of PSALM’s corporate life to 2036, from the original expiry of 2026, will thus allow the state-run firm to spread the collection of universal charges for stranded debts  (UC-SD) and contract costs (UC-SCC) over a period longer than what had been earlier proposed.

Last year, the Department of Energy submitted a priority bill to extend PSALM’s corporate life before the Joint Congressional Power Commission and the Legislative-Executive Development Advisory Council (Ledac).

But no decision has been rendered to date.

Almendras has since stressed the necessity of collecting the universal charge for stranded debt and stranded contract costs to help bring down the energy sector’s debt.

“Even our children will be paying for this. The power debt was the single largest debt of the Philippine Republic at previously P932 billion, and now, we have brought it down to P915 billion [as of end June 2011],” Almendras explained.

Of the P915 billion, Psalm’s total liabilities accounted for the bulk with P767.08 billion; National Power Corp., with P49.63 billion; and National Transmission Corp., with P98.48 billion.

Of the total amount, outstanding liabilities came to about P754.24 billion, while contingent liabilities accounted for the remaining P160.95 billion.