| By Donnabelle L. Gatdula (The Philippine Star) Updated October 29, 2010 12:00 AM |
MANILA, Philippines – The Power Sector Assets and Liabilities Management Corp. (PSALM) is mulling the possibility of pulling out its universal charge (UC) petitions with the Energy Regulatory Commission (ERC).
PSALM president and CEO Emmanuel Ledesma told a press conference yesterday that they are currently reviewing the privatization proceeds of the National Power Corp. (Napocor).
Ledesma said they would consider withdrawing the UC applications which seeks to increase electricity rates by nine to 50 centavos per kilowatthour (kwh) in the next 20 years, depending on the outcome of their reassessment of the proceeds from the sale of Napocor assets.
But the PSALM chief is quick to point out that they would need to study first the repercussions of the withdrawal of the rate hike petitions.
“It’s one of our options. We have to clarify first, what are the repercussions of withdrawing? We have to make sure that we’re going to be able to re-file again,” he said.
He explained that with the new administration, they would want to ensure the welfare of the consumers.
He said they would want to make sure that the applications are consistent with the provisions of the Electric Power Industry Reform Act (EPIRA) or Republic Act 9136.
“It’s in the EPIRA, the mandate for PSALM is in the law. After we privatize the assets and the independent power producer (IPP) contracts, obviously we pay off the debts. Now whatever is remaining, how is that going to be paid for? The EPIRA says that there is this universal charge that would be passed on to the consumers,” he said.
Under the EPIRA, PSALM is mandated to privatize Napocor’s power plants and IPP contracts. The latter are the power firm’s contracted capacities with third-party power generators.
The EPIRA also states that government may collect Napocor’s outstanding contract costs and debts that would not be covered by the privatization proceeds from consumers through the universal charge component of electricity bills.
Based on PSALM’s the application, it would need to recover P470.8 billion worth of stranded debts and P22-billion stranded contract costs of the Napocor.
PSALM submitted two options to recover the P471-billion stranded debts: by charging electricity consumers 30 centavos per kwh for 17 years or 22.5 centavos per kwh for 25 years.
For the stranded contract cost, PSALM proposes three options: 50.24 centavos per kwh for a one-year recovery period; 16.04 centavos for a three-year period; or 9.20 centavos per kwh for a five-year period.
Earlier, PSALM reiterated that the proceeds from the privatization of the power assets of the Napocor were used to settle the financial obligations of the state power firm as clearly stipulated in the provisions of the EPIRA.
PSALM president and CEO Emmanuel Ledesma told a press conference yesterday that they are currently reviewing the privatization proceeds of the National Power Corp. (Napocor).
Ledesma said they would consider withdrawing the UC applications which seeks to increase electricity rates by nine to 50 centavos per kilowatthour (kwh) in the next 20 years, depending on the outcome of their reassessment of the proceeds from the sale of Napocor assets.
But the PSALM chief is quick to point out that they would need to study first the repercussions of the withdrawal of the rate hike petitions.
“It’s one of our options. We have to clarify first, what are the repercussions of withdrawing? We have to make sure that we’re going to be able to re-file again,” he said.
He explained that with the new administration, they would want to ensure the welfare of the consumers.
He said they would want to make sure that the applications are consistent with the provisions of the Electric Power Industry Reform Act (EPIRA) or Republic Act 9136.
“It’s in the EPIRA, the mandate for PSALM is in the law. After we privatize the assets and the independent power producer (IPP) contracts, obviously we pay off the debts. Now whatever is remaining, how is that going to be paid for? The EPIRA says that there is this universal charge that would be passed on to the consumers,” he said.
Under the EPIRA, PSALM is mandated to privatize Napocor’s power plants and IPP contracts. The latter are the power firm’s contracted capacities with third-party power generators.
The EPIRA also states that government may collect Napocor’s outstanding contract costs and debts that would not be covered by the privatization proceeds from consumers through the universal charge component of electricity bills.
Based on PSALM’s the application, it would need to recover P470.8 billion worth of stranded debts and P22-billion stranded contract costs of the Napocor.
PSALM submitted two options to recover the P471-billion stranded debts: by charging electricity consumers 30 centavos per kwh for 17 years or 22.5 centavos per kwh for 25 years.
For the stranded contract cost, PSALM proposes three options: 50.24 centavos per kwh for a one-year recovery period; 16.04 centavos for a three-year period; or 9.20 centavos per kwh for a five-year period.
Earlier, PSALM reiterated that the proceeds from the privatization of the power assets of the Napocor were used to settle the financial obligations of the state power firm as clearly stipulated in the provisions of the EPIRA.
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