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MANILA, Philippines - The Energy Regulatory Commission (ERC), the country’s power sector watchdog, has vowed to protect the interest of the consumers amid a number of pending power rate hike petitions.
ERC executive director Francis Saturnino Juan admitted that there are several rate hike applications they would need to decide soon.
“Any approval the Commission will issue, even if warranted and based on the evidence, will impact on the electricity bill and ultimately on the electricity consumers. Rest assured, we are here to ascertain if these amounts will be reasonable for recovery as far as the UC (universal charge), and FIT-All (feed-in-tariff allowance) later on if we have already established the FIT rates,” he said.
He said they are also uncertain which of the two rate petitions would be decided upon first.
“It’s difficult to speculate. But the FIT-All will come after the FITS are established. After the FITs are set, it will only be then that it will determined what would be the amount needed to pay the renewable energy developers,” he said.
Recently, state-run Power Sector Assets and Liabilities Management Corp. (PSALM) sought the ERC’s nod to collect a total of 39 centavos per kilowatthour (kwh) in the form of a UC to recover the National Power Corp.’s stranded debts (SD) and stranded contract costs (SCC) incurred over the years.
The Electric Power Industry Reform Act (EPIRA) provides that a universal charge shall be imposed on all electricity end-users for the payment of Napocor’s SD and SCC.
The EPIRA defines SD as any unpaid financial obligation that has not been liquidated by the proceeds from the privatization of the generating firm’s assets, and SCC as the excess of the contracted cost of electricity under eligible contracts over the actual selling price of the contracted energy output of these contracts in the market.
As this developed, the Freedom from Debt Coalition said the recent petition of the Power Sector Assets and Liabilities Management Corp. (PSALM) seeking to pass on P139 billion stranded debt and contract costs of the Napocor to consumers through the UC would have adverse social and economic consequences.
With this, the consumer advocate demanded that PSALM and Napocor open their books to the public.
In a statement, FDC’s Maitet Diokno-Pascual said this is important so that the citizens and consumers can ascertain whether this application is fair and reasonable.
“Because this is a universal charge, we expect this to weigh more heavily on poor households. For this reason, the Energy Regulatory Commission (ERC) must carefully scrutinize this application and be absolutely certain that the numbers are justified. We are certain that the UC for stranded costs and debts is a charge that poor households cannot afford. Any charge, whether one centavo or 39 centavos per kilowatthour, is too heavy for households that do not earn enough to meet their basic needs,” she said.
Diokno-Pascual said PSALM, Napocor and ERC must be fully transparent in showing what PSALM, with ERC approval, is recovering from all electricity consumers through this charge.
“We are aware that the ERC has been regulating Napocor’s generation charges and we know that Napocor’s debts and contractual obligations are embedded in these charges. We caution against any double charging that may arise from imposing this UC on us,” she said.
“We are also aware that Napocor’s debts increased by over a billion between 2001 and 2010, and that the provision in the EPIRA for stranded debt recovery covers only those debts of Napocor before EPIRA was passed,” she added.
Diokno-Pascual said that PSALM must fully and adequately explain why Napocor’s debts grew rather than shrank, even after all the rate adjustments it obtained from the ERC starting in 2004-2005. PSALM is the state agency tasked to privatize power assets to help generate funds to pay off debt.
ERC executive director Francis Saturnino Juan admitted that there are several rate hike applications they would need to decide soon.
“Any approval the Commission will issue, even if warranted and based on the evidence, will impact on the electricity bill and ultimately on the electricity consumers. Rest assured, we are here to ascertain if these amounts will be reasonable for recovery as far as the UC (universal charge), and FIT-All (feed-in-tariff allowance) later on if we have already established the FIT rates,” he said.
He said they are also uncertain which of the two rate petitions would be decided upon first.
“It’s difficult to speculate. But the FIT-All will come after the FITS are established. After the FITs are set, it will only be then that it will determined what would be the amount needed to pay the renewable energy developers,” he said.
Recently, state-run Power Sector Assets and Liabilities Management Corp. (PSALM) sought the ERC’s nod to collect a total of 39 centavos per kilowatthour (kwh) in the form of a UC to recover the National Power Corp.’s stranded debts (SD) and stranded contract costs (SCC) incurred over the years.
The Electric Power Industry Reform Act (EPIRA) provides that a universal charge shall be imposed on all electricity end-users for the payment of Napocor’s SD and SCC.
The EPIRA defines SD as any unpaid financial obligation that has not been liquidated by the proceeds from the privatization of the generating firm’s assets, and SCC as the excess of the contracted cost of electricity under eligible contracts over the actual selling price of the contracted energy output of these contracts in the market.
As this developed, the Freedom from Debt Coalition said the recent petition of the Power Sector Assets and Liabilities Management Corp. (PSALM) seeking to pass on P139 billion stranded debt and contract costs of the Napocor to consumers through the UC would have adverse social and economic consequences.
With this, the consumer advocate demanded that PSALM and Napocor open their books to the public.
In a statement, FDC’s Maitet Diokno-Pascual said this is important so that the citizens and consumers can ascertain whether this application is fair and reasonable.
“Because this is a universal charge, we expect this to weigh more heavily on poor households. For this reason, the Energy Regulatory Commission (ERC) must carefully scrutinize this application and be absolutely certain that the numbers are justified. We are certain that the UC for stranded costs and debts is a charge that poor households cannot afford. Any charge, whether one centavo or 39 centavos per kilowatthour, is too heavy for households that do not earn enough to meet their basic needs,” she said.
Diokno-Pascual said PSALM, Napocor and ERC must be fully transparent in showing what PSALM, with ERC approval, is recovering from all electricity consumers through this charge.
“We are aware that the ERC has been regulating Napocor’s generation charges and we know that Napocor’s debts and contractual obligations are embedded in these charges. We caution against any double charging that may arise from imposing this UC on us,” she said.
“We are also aware that Napocor’s debts increased by over a billion between 2001 and 2010, and that the provision in the EPIRA for stranded debt recovery covers only those debts of Napocor before EPIRA was passed,” she added.
Diokno-Pascual said that PSALM must fully and adequately explain why Napocor’s debts grew rather than shrank, even after all the rate adjustments it obtained from the ERC starting in 2004-2005. PSALM is the state agency tasked to privatize power assets to help generate funds to pay off debt.
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