PSALM plans to hike Napocor rates in Luzon, Visayas
State-run Power Sector Assets and Liabilities Management Corp. (PSALM) plans to hike the power generation rates of National Power Corp. in Luzon by 10.59 centavos per kilowatt-hour, and in the Visayas by 11.57 centavos per kWh over the next five years.
But power consumers in Mindanao may get some relief as PSALM seeks to refund 2.58 centavos per kWh, also within a five-year period, according to a notice published by the Energy Regulatory Commission yesterday.
The ERC will conduct a series of hearings next month before it decides on the PSALM petition.
PSALM said the petition was for the recovery of fuel and purchased power costs, and foreign exchange related costs covering March 2010 up to February 2011. In Luzon and the Visayas, the amount to be recovered stood at about P5 billion while in Mindanao, PSALM needs to refund P858 million to consumers.
PSALM stressed that the approval of this 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 2011, the outstanding financial obligations of PSALM stood at $15.58 billion.
The government, through PSALM, has been trying to reduce the debt but is having a hard time doing so because Napocor still manages and operates the remaining government-owned power plants and contracted capacities from independent power producers.
These facilities and contracts have yet to be privatized and turned over to the private sector.
Among the measures being implemented by PSALM are the implementation of a liability management program, the sale of the remaining state-owned power assets and contracted capacities, and the recovery of at least P140 billion worth of contract costs of stranded debts from power consumers through the imposition of a universal charge.
At present, the petition to collect the entire P140 billion is pending with the ERC.
