ERC asked to defer power-rate adjustments

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THURSDAY, 14 OCTOBER 2010 12:06 BUTCH FERNANDEZ / REPORTER

PENDING a review by the Department of Energy (DOE), Sen. Ralph Recto recommended that the Energy Regulatory Commission (ERC) defer action on any petition for power-rate hikes until the DOE finishes its evaluation of contracts entered into by the Power Sector Assets and Liabilities Management (PSALM) Corp.

“We should wait for the results of this review,” Recto said. “We cannot just burden our consumers or our taxpayers with a debt that should have been paid or drastically reduced by now.”

In a statement, Recto reminded government regulators that PSALM “still has a lot of explaining to do on why, after almost 10 years and after selling almost 90 percent of our power-generating assets, its debts still stand at $16.5 billion, or the same amount it was mandated to pay when it was created.”

Recto recalled that PSALM was created by law in 2001 under Republic Act 9136, also known as the Electric Power Industry Reform Act (Epira), with a specific mandate to manage the finances and privatization of the state-owned National Power Corp. (Napocor) assets.

He noted that, at present, the outstanding debt of Napocor remained at $16.5 billion, despite reported proceeds from its privatization.

“The consumers have a right to know why their electric bills continue to increase. Those responsible for this financial mess should be made accountable,” Recto said.

He pointed out that during the DOE budget hearing at the Senate on Monday, Energy Secretary Jose Rene Almendras confirmed that his department was still in the process of reviewing the powers contracts entered into by PSALM.

Recto added that based on PSALM’s application, it would need to charge the consumers 30 centavos per kiloWatt-hour for 17 years but in the Senate budget hearing on Monday, it said it would decrease it to 18 centavos per kWh.