Manila Times.net
Published : Wednesday, March 07, 2012 00:00 Written by : Euan Paulo C. Añonuevo, Reporter
The Energy Regulatory Commission (ERC) bucked the Finance department’s call for the approval of an electricity rate increase meant to settle National Power Corp.’s (Napocor) obligations.
Francis Saturnino Juan, ERC executive director, said that the power sector’s price regulator had not received any letter from the Finance department that allegedly sought the approval of the Universal Charge (UC) rate adjustment petitions of the Power Sector Assets and Liabilities Management Corp. (PSALM).
In any case, he said that the ERC is required by law to conduct and finish the public hearings on the petitions before it can decide on them.
“Our records do not reflect any incoming correspondence from [Finance] Secretary [Cesar] Purisima dealing on the subject of the UC petitions. Of course, what the ERC expects is the filing of the appropriate pleadings in the pending cases before it and not just mere letters, but neither do the case folders indicate the filing by PSALM of any motion seeking the resolution of its petitions,” he added.
The ERC official’s pronouncements were in response to Purisima’s call for approval of PSALM’s UC petitions amounting to P0.0313 per kilowatt-hour and P0.3666 kWh to recover Napocor’s Stranded Debts (SD) and Stranded Contract Costs (SCC), which were valued at P65.02 billion and P74.30 billion, respectively.
Napocor’s SD refer to “any unpaid financial obligations of Napocor which have not been liquidated by the proceeds from the sales and privatization of [Napocor] assets” based on Section 4 of Republic Act No. 9136 or the Electric Power Industry Reform Act of 2001.
Financial obligations pertain to net obligations of Napocor after deducting the P200 billion debt assumed by the national government.
SCC refer to the excess of the contracted cost of electricity under eligible independent power producer contracts of Napocor over the actual selling price of the contracted energy output of such contracts in the market.
The Finance department-chaired PSALM, the state-agency tasked with the privatization and management of Napocor’s assets and liabilities, filed the said rate hike petitions on June 28, 2011.
Under the law, these obligations are to be paid for by all consumers through the UC component of their electricity bills.
The ERC has scheduled and conducted hearings on the UC petitions beginning on August 22, 2011. During the October 3, 2011 hearing, one of the interveners, the Philippine Associated Smelting and Refining Corp. (PASAR), asked for the outright dismissal of the cases and manifested that it would be filing its motion to dismiss.
After PASAR filed on Octorber 20, 2011 its motion to dismiss, PSALM filed its opposition, to which PASAR filed its reply on November 18, 2011. After a review of the legal and novel issues raised by PASAR, the ERC on January 16 upheld the validity of the filing of PSALM’s UC petitions and rejected PASAR’s prayer to dismiss the case. At the same time, it ordered the resumption of the hearings on March 12 and 13.
“PSALM should know the status of its petitions as it is furnished with all the pleadings filed by the other parties and the orders issued by the ERC. It should be incumbent upon it to apprise its officials. As for the requested action, the ERC will not shirk from its duty to resolve the cases without delay, but only after the hearings shall have been terminated,” Juan said.
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