PSALM may review power deals to cut cost

Manila Standard Today
by Alena Mae S. Flores


Power Sector Assets and Liabilities Management Corp. said Wednesday it is open to renegotiating the contractual obligations of independent power producers to generate savings to the government.


PSALM said in a statement it would also study the implications of the proposal by some lawmakers to withdraw petitions filed for the recovery of the universal charge for stranded debts and contract costs of National Power Corp.


PSALM president and chief executive Emmanuel Ledesma Jr. said the agency was awaiting the formal resolution of the House of Representatives on universal charge applications with the Energy Regulatory Commission.


“PSALM will assess the implications of the proposal and will continuously seek other possible sources to narrow the huge gap between the privatization proceeds and the outstanding maturing obligations of the Napocor should the PSALM Board adhere to the recommendation to withdraw the universal charge applications,” Ledesma said.


Ledesma dismissed allegations that PSALM, ERC, and the Energy Department were remiss in their obligations to reduce power rates.


PSALM said it had been accused of “milking the cow” by draining the public of cash in its move to pass on the recovery of Napocor’s stranded obligations to consumers.


“It is important to point out that the recovery of the universal charge is mandated under the Electric Power Industry Reform Act and PSALM has stringently followed the amended guidelines issued by the ERC in determining the amount of the universal charge-stranded debt and universal charge-stranded contract cost,” Ledesma said.


Ledesma said the Epira allowed the recovery of the universal charge since it is critical to the government’s liability management program for the power sector.


The universal charge collections will be matched with existing debt maturities, leading to lower PSALM’s borrowings.


The House of Representatives also proposed to conduct another round of renegotiations on the government’s contractual obligations with independent power producers.