Thanks for small blessings. The unrecovered costs of electricity represented by a charge to cover the remaining part of the gigantic debt of the National Power Corp. (Napocor) and the real cost to government of power bought from independent power producers (IPP) will take some more time before they are added to the electricity bills of consumers, at least after the Christmas season it would seem.
This is because the Power Sector Assets and Liabilities Management Corp. (Psalm), which filed its proposed rates to collect these costs to the Energy Regulatory Commission, (ERC) is reviewing them and just might reform the proposal.
Emmanuel Ledesma Jr., Psalm president and chief executive, earlier said they is reviewing the petitions so that the public will be affected at the least possible way. “We also want to do this properly and be very careful about this extremely sensitive issue.”
But before withdrawing their petition, Ledesma said they have to be sure they can refile or if there are new rules or guidelines and wants to clarify with ERC chairman Zenaida Cruz-Ducut these issues and what repercussions, if any, there are, if they decide to pull out their current universal charge-stranded debts (UC-SD) and the universal charge-stranded contract costs (UC-SCC) petitions.
UC-SDs are the debts of Napocor that have not been liquidated by the proceeds from the sales and privatization of its assets and after deducting P200 billion of the debts assumed by the government. On top of this, additional charge sought by Psalm for recovery of Napocor’s US-SSCs refer to the excess of the contracted costs of electricity under eligible IPP contracts of Napocor over the actual selling price of the contracted energy in the market.
Francis Saturnino Juan, commission executive director, said, “We issued a proposed amendment to the rules governing the UC-SCC and UC-SD filing. And after we shall have finalized these amendments, we would already anticipate that Psalm will already file its application.”
He added that the next deadline for Psalm to submit its petition will be on March 15 of every year, the date set by the Electric Power Industry Reform Act (Epira) has set for Psalm to file its application for the UC.
Juan emphasized the need to determine which are eligible to be included as part of the SCC and SD recovery so that recovery should be made through separate rates. “If everything is lumped together, then there is danger of having a double recovery if that expense is being recovered as part of the electricity rates and the same time being recovered through the UC. The commission will not allow that to happen.”
He declined to speculate how the commission will treat the expenses associated with the IPP contracts that are ineligible under the UC-SCC, but which are also being recovered as part of the UC-SD. These form part of the cash outflow in the operations of Psalm, and the commission still would have to wait for their filing to be able to decide.
Based on Psalm simulations, the Napocor stranded debts are estimated to be P470.87 billion by the end of 2005. To start recovering this amount, it proposed a uniform stranded debt charge of P0.3049 per kiloWatt-hour (kWh) on all electricity consumers.
On June 29, 2010, the ERC said the Psalm simulation had shown the stranded debts to have reach P54.898 billion or at a rate of P0.8677/kWh.
The Psalm petition (that might be withdrawn) showed the SCC component of the universal charge for the Luzon grid amounted to P22.256 billion and asked that it be authorized to impose a UC of up to P0.5024/kWh to recover these costs.
On June 29, 2010, Psalm filed a similar petition, this time for recovery of its stranded contract costs for 2009 amounting to P26.685 billion, equivalent to up to P0.5720/kWh as additional UC.
(Paul A. Isla)
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