PSALM to file recovery of P10.8-billion N.P.C. debt

By Lenie Lectura - June 25, 2019
https://businessmirror.com.ph/2019/06/25/psalm-to-file-recovery-of-p10-8-billion-n-p-c-debt/

THE Power Sector Assets and Liabilities Management Corp. (PSALM) said on Monday it would file next week before the Energy Regulatory Commission (ERC) two petitions to recover P10.843 billion from consumers to pay for the debts incurred by the National Power Corp. (NPC).

“We are timely filing new petitions for 2018 Universal Charge-Stranded Contract Costs [UC-SCC] amounting to P6.12 billion or equivalent to 6.2 cents per kilowatt-hour [kWh] and for the 2018 Universal Charge-Stranded Debts [UC-SD] amounting to P4.722 billion or equivalent to 63 centavos per kWh,” PSALM President Irene Joy Garcia said during the state firm’s 18th anniversary celebration.

PSALM will propose a one-year recovery period for UC-SCC while the UC-SD would be collected for seven years.

SCC refers to the excess of NPC’s contracted cost of electricity with independent power producers over the actual selling price of the output. SD refers to NPC’s unpaid obligations that were not liquidated by proceeds from the sale of its assets.

The UC, which is a separate line item in consumers’ electric bills, has different subcomponents, depending on the utilization of the funds as specified in the UC collection.

PSALM said it has been diligent in meeting the annual deadline for filing the UC petition, set every June 30.

Just recently, the ERC approved Psalm’s 2014 UC-SCC application amounting to 5.43 centavos per kWh. Garcia said collection would be enforced starting August this year. The current UC-SD, meanwhile, is 4.28 centavos per kWh. Thus, total UC for PSALM is 9.71 centavos per kWh.

Garcia said there is a possibility that consumers will no longer pay for additional UC once the Murang Kuryente Act takes effect.

“The reason we need to file this is because if we don’t file it, we will be forfeiting the opportunity because there is a deadline to file it. This is just filing the petition and pwede pa mahabol ng Murang Kuryente bill if they were able to come up with IRR and we start already with the funding from the Malampaya. Then there’s a possibility there will be no more additional or new UC. Existing UC will still be there. We will be able to settle them as they fall due,” Garcia said.

Under the proposed measure, which is expected to be signed by President Duterte, the Malampaya Fund will be tapped to cover the SD and SCC of NPC instead of expanding the coverage and increasing the lifeline rate subsidy.

“At this juncture, we want to thank Sen. Sherwin Gatchalian and his A-Team for pushing for the Murang Kuryente bill, which will hopefully address the impact of the UC on the electricity consumers,” Garcia said.

Gatchalian, who was present during the celebration of PSALM’s anniversary, said the bill is expected to be signed soon.

“For the longest time, Filipinos have been burdened by NPC’s debts through the universal charges for stranded debts and stranded contract costs incorporated in the monthly electricity bill. I hope President Duterte will sign this landmark bill immediately for the Filipino people to finally receive tangible benefits from the Malampaya Fund as soon as possible,” Gatchalian said.

To illustrate his point, Gatchalian said lifeline rates—a subsidy for those consuming less than 100 kWh per month—are already being implemented. Households consuming more than 100 kWh shoulder the lifeline rates.

Using the Malampaya Fund to subsidize the lifeline rates will only give an average household consuming 200 kWh a total monthly savings of P21.54—equivalent to a half kilo of rice—compared with the P172 monthly savings the same household will get with the implementation of the Murang Kuryente Act.

Gatchalian said the bigger savings may be used to buy an additional 3 to 4 kilos of rice per month or roughly a sack of rice per year.

The lawmaker estimated that power consumers have already shelled out P0.1938/kWh from January 2013 to May 2017 to pay for NPC’s debts through the UC-SD and UC-SCC.

Meanwhile, from June 2017 to December 2018, Filipino households paid P0.2203/kWh.