Published June 4, 2017, 10:00 PM By Myrna M. Velasco
The Energy Regulatory Commission (ERC) has extended until July 31 this year the deadline for state-run Power Sector Assets and Liabilities Management Corporation (PSALM) to file its petitions for universal charges (UC) – primarily intended to recoup costs on stranded liabilities that will have a “rate hike effect” on the consumers’ electric bills.
Stretched deadline until June 13 this year had likewise been granted to National Power Corporation (NPC) for its filing of 2018 UC-missionary electrification (UCME) requirements that would be funneled as subsidy to its Small Power Utilities Group (SPUG) service domains.
While granting the timeframe extension, the industry regulator has yet to render ruling also on the R105 billion worth of pending UC cost recoveries of the company on stranded debts (SD) and stranded contract costs.
In a resolution promulgated by the regulatory body last May 16, it explicitly stipulated that “PSALM is authorized to file its petition for SCC and SD portion of the UC for calendar year 2016 and update its implementation of 2007-2010 of NPC-SCC portion of the UC under the true-up adjustment on or before July 31, 2017.”
A “true-up” would refer to the mechanism permitted under the Electric Power Industry Reform Act (EPIRA) for UC charges to be adjusted corresponding to the applied level of cost recoveries.
ERC Officer-in-Charge Alfredo S. Non said “we have resolved to accede to the requests of PSALM and NPC-SPUG to enable them to complete all the necessary documents to support their respective petitions.” The prescribed deadline for UC filings had been set March 15 every year.
The regulatory body indicated that both NPC and PSALM communicated “that they were constrained to request for an additional period of time within which to submit the required petitions since the original deadline is no longer feasible for them considering the availability of the certified financial statements which will serve as the bases in calculating subject availments.”
For its 2016 filing of UC, PSALM Officer-in-Charge Lourdes S. Alzona indicated that they are still finalizing calculation and would be adhering to required submissions to the Commission on Audit.
PSALM’s UC cost recoveries already swelled to a whopping P105 billion as of last year – aggregated for both its stranded debts and stranded contract costs.
Over P35 billion had been applied for as cost recoveries for stranded contract costs, with true-up adjustments from years 2011 to 2015. Additionally, the petition for UC-stranded debts had already risen to P70 billion, as culled from PSALM’s pending petitions.
The company previously noted that equivalent cost recoveries for the UC-SCC will be P0.03 per kWh over four years; and P0.06 per kWh for the UC on stranded debts.
It was similarly emphasized that if the UC cost recovery applications would be approved, this will cut down the level of the power sector’s stranded liabilities currently estimated at P245 billion until the end of PSALM’s corporate life in 2026.