State-run Power Sector Assets and Liabilities Management Corp. seeks to increase electricity rates in Luzon and the Visayas to recover from consumers P3.85 billion in foreign exchange related and fuel and purchased power costs.
PSALM, in a petition filed with the Energy Regulatory Commission, wanted the power rates of state run National Power Corp. (Napocor) raised by 26.89 centavos per kilowatt-hour in Luzon and 12.33 centavos per kWh in Visayas, over five years.
In Mindanao, PSALM has proposed to refund P1.74 billion, equivalent to a reduction in Napocor power rates by 4.48 centavos per kWh, also within five years.
The application for the recovery of these costs, which was filed last April 30, covers the billing period March 2011 to December 2011.
It also covers the cost of securing fuel for 10 facilities, namely the 630-megawatt Malaya thermal power plant in Rizal; the three power facilities under the 146-MW Naga power plant complex in Cebu; power barges 101, 102, 103 and 104, which can each generate 32 MW; Southern Philippines Power Corp.’s (SPPC) 55-MW Bunker-C fired power station in Sarangani; and Western Mindanao Power Corp.’s (WMPC) 100-MW diesel-fired generating facility in Zamboanga City.
PSALM said in its petition that the approval of this latest application was necessary to “improve its financial standing, allowing it to efficiently comply with its mandate under the Electric Power Industry Reform Act to liquidate all of Napocor’s financial obligations and stranded contract costs in an optimal manner.”
As of end December 2011, the outstanding financial obligations of PSALM stood at $15.88 billion.
The government, through PSALM, has been trying to bring down these debts, but has had a hard time doing so, with Napocor still managing and operating the remaining government-owned power plants and contracted capacities from independent power producers.
These facilities and contracts have yet to be privatized or sold and turned over to the private sector.
Among the measures being implemented by PSALM to manage its debts include the implementation of its liability management program, sale of the remaining state-owned power assets and contracted capacities, and recovery of at least P140 billion in stranded contract costs from all power consumers through the imposition of a universal charge.
The petition to collect the P140 billion remains pending at the ERC.
Under this petition filed last June, PSALM wants to collect from power consumers 36 centavos per kWh over the next four years, and a separate 3 centavos per kWh within 15 years.
The 36 centavos per kWh that PSALM wants to pass on to consumers cover the payment of stranded contract costs, while the 3 centavos per kWh will be used to settle stranded debts.