Universal Charge
Administration of Universal Charge

Lighting the countryside: PSALM continues to significantly contribute to government efforts to provide a steady and reliable supply of electricity in the country's far-flung areas.

Communities in these areas get much-needed electric power through PSALM’s prudent management and disposal of the collections from the Universal Charge (UC) for Missionary Electrification (UC-ME).

A non-bypassable charge mandated under Section 34 of the EPIRA, the UC is imposed on electricity consumers for the following purposes:

  1. Missionary electrification;
  2. Payment for stranded debts and stranded contract costs;
  3. An environmental charge for watershed rehabilitation and management;
  4. Equalization of taxes and royalties applied to indigenous or renewable sources of energy vis-à-vis imported energy fuels; and
  5. A charge to account for all forms of cross-subsidies.

At present, only the UC-ME and the UC for Environment and Watershed Rehabilitation and Management (UC-EWRM) amounting to PhP0.0025 per kilowatt-hour are imposed on and are being collected from electricity consumers.

The UC is collected monthly by the National Grid Corporation of the Philippines and the distribution utilities based on the approval of the Energy Regulatory Commission (ERC). The collections are remitted to PSALM every 15th of the following month.

Universal Charge (UC) Administration

  1. Universal Charge Remittances, Interests & Disbursements
  2. As of 31 December 2016, remittances of collecting entities (CEs) to PSALM amounted to PhP110.293 billion, while interest earnings from deposits and placements of UC funds amounted to PhP0.149 billion. On the other hand, UC fund disbursement amounted to PhP109.776 billion. Below are the details of UC remittances, interests and disbursements:

    Universal Charge Remittances, Interests and Disbursements
    As of 31 December 2016 (In PhP Billion)

    Particulars Remittances Interests Disbursements Balance
    Special Trust Funds: Missionary Electrification (ME) - NPC SPUG 62.069 0.044 62.0891/ 0.024
    ME - Renewable Energy Developer Cash Incentive (REDCI) 0.322 0.001 0.151 0.172
    Environmental Charge (EC) 1.832 0.096 1.491 0.437
    Stranded Contract Cost (SCC) 46.070 0.008 46.045 0.033
    Total 110.293 0.149 109.776 0.666

    1/Includes Disbursement to Oriental Mindoro Electric Cooperative, Inc. (ORMECO) in the total amount of PhP40,442,954.47, for the recovery of fuel costs chargeable against the UC-ME fund, pursuant to ERC Orders dated 16 June 2014 and 24 September 2014 covering ERC Case No. 2013-191RC.

    The following disbursements/fund transfers were made from the respective UC Special Trust Fund (STF):

    1. UC-ME and EC

      • PhP62.0891/ billion and PhP1.491 billion were paid to NPC, chargeable against the UC-ME and EC fund, respectively, in accordance with the provisions of the EPIRA and the Energy Regulatory Commission (ERC) decisions/orders.
    2. REDCI

      • Cash incentive totaling PhP0.151 billion was paid to the following renewable energy (RE) developers, in accordance with the ERC-approved Rules to Govern the Availment and Disbursement of Cash Incentive to RE Developers Operating in Missionary Areas:
        1. Romblon Electric Cooperative, Inc. (ROMELCO) for the 900 kW Cantingas Mini Hydro Power Plant Corporation (CHPC);
        2. Sunwest Water and Electric Co. (SUWECO) for the 1.5 MW Hitoma 1 & 2.1 MW Solong Hydroelectric Power Plants; and
        3. ORMECO for the 2.1 MW Linao Cawayan Mini-Hydro Power Plant (LCMHPP) - Lower Cascade.

        Accounting for the inflows and outflows of the UC fund leaves it with a balance of about PhP0.666 billion as of 31 December 2016.

      • Remittances for CY 2016

        For the period January – December 2016, PSALM received PhP25.434 billion in UC remittances, broken down as follows:

        UC Remittances to PSALM
        For the Period January - December 2016 (In PhP Billion)

        Month ME (NPC-SPUG) ME (REDCI) EC SCC Total
        January 0.917 0.010 0.015 1.145 2.087
        February 0.858 0.009* 0.014 1.075 1.956
        March 0.826 0.009 0.013 1.031 1.879
        April 0.904 0.010 0.015 1.126 2.055
        May 0.870 0.010 0.014 1.086 1.980
        June 1.010 0.011 0.019* 1.250 2.290*
        July 0.983 0.011 0.016 1.222 2.232
        August 0.980 0.011 0.016 1.220* 2.227
        September 0.980 0.011 0.016 1.219 2.226
        October 0.974 0.011 0.016 1.229 2.230
        November 0.949 0.010 0.016* 1.178 2.153
        December 0.933 0.011* 0.013* 1.162 2.119
        Total 11.184 0.124 0.183 13.943 25.434

        *Difference of PhP.001 billion with previous reports was due to rounding off

      • Disbursements for CY 2016

        For the period January – December 2016, PSALM disbursed a total amount of PhP25.169 billion to UC beneficiaries as follows:

        UC Disbursements of PSALM
        For the Period January - December 2016 (In PhP Billion)

        Month ME (NPC-SPUG) ME (REDCI) SCC1/ Total
        January 0.925 - 1.151 2.076
        February 0.857 0.002 1.075 1.934
        March 0.823 0.0062/ 1.026 1.8552/
        April 0.915 0.0042/ 1.149 2.0682/
        May 0.872 0.007 1.076* 1.955
        June 0.994 0.001 1.241 2.237
        July 0.991 0.002 1.225 2.218
        August 0.985 0.001 1.229 2.215
        September 0.964 0.003* 1.196 2.163
        October 0.992 0.002 1.242 2.236
        November 0.921 0.001 1.160 2.082
        December 0.951* 0.000* 1.179* 2.130
        Total 11.191 0.029 13.949 25.169

        1/Transferred from the UC-SCC STF to the UC-SCC SFA of PSALM
        2/Difference from prior report due to ROMELCO’s disbursement originally recorded as March 2016 disbursement but disbursed only on 01 April 2016
        * Difference of PhP.001 billion is due to rounding off

        For the period January – December 2016, PSALM disbursed PhP11.191 billion to NPC-SPUG to fund the missionary electrification functions, chargeable against the UC-ME fund. This is pursuant to the following ERC Decisions/Orders:

        Date Particulars ERC Case No.
        12 August 2013 ERC Decision on CY 2011 True-up Adjustments (PhP4.651 billion) 2012-085 RC
        10 October 2013 ERC Decision on CY 2010 True-up Adjustments (PhP2.566 billion) 2012-046 RC
        03 November 2013
        & 17 August 2015
        ERC Order on CY 2015 UC-ME Subsidy 2014-135 RC
        20 April 2015 ERC Order on CY 2014 UC-ME Subsidy (PhP2.763 billion) 2012-085 RC

        In accordance with the ERC decision dated 28 January 2013 under Case No. 2011-091 RC, the amount of PhP13.949 billion was transferred from the UC-SCC STF to the UC-SCC SFA for the period of January to December 2016.

  3. ERC - Approved UC Rates
  4. The table below shows the ERC-approved UC rates being implemented as of 31 December 2016:

    Type PhP/kWh
    UC-ME 0.1561
    UC-EC 0.0025
    UC-SCC 0.1938
    Total 0.3524

    On 03 November 2014, the ERC issued an Order provisionally approving the instant petition filed by NPC on the proposed Subsidized Approved Generation Rate (SAGR) and the UC-ME for years 2015 to 2016. NPC was authorized to extend the implementation of the current CY 2014 UC-ME subsidy amounting to PhP0.1561/kWh from January 2015 to August 2015, broken down as follows:

    Particulars CY 2015
    UC-ME Subsidy 0.0454 0.1163
    Cash Incentive for RE Developers 0.0017 0.0017
    True-up Adjustment (2011) 0.0709 0
    True-up Adjustment (2010) 0.0381 0.0381
    Total 0.1561 0.1561

    Further, the ERC issued an Order dated 17 August 2015 extending the provisional authority it granted under the ERC Order dated 03 November 2014, until revoked or made permanent by the ERC.

  5. Updates on UC Rate Applications
    1. ME
    2. The ERC, in its Order dated 17 August 2015 in relation to Case No. 2014-135 RC, extended the provisional authority it granted in an earlier Order dated 03 November 2014, until revoked or made permanent by the ERC, pertinent provisions of which are quoted below:

      1. All distribution utilities and the National Grid Corporation of the Philippines (NGCP) are directed to extend the collection of the provisionally-approved UCME subsidy of PhP0.1561/kWh from the consumers and remit the same to PSALM, on or before 15th day of the succeeding month, until the final resolution of the instant petition;
      2. PSALM is directed to release to NPC the amount collected from the implementation of the UCME while amount collected pertaining to the PhP0.0017/kWh Cash Incentive (CI) shall be disbursed by PSALM to Renewable Energy Developers in accordance with the Order dated 03 November 2014; and
      3. The final UCME and the disbursements made shall be considered in the final evaluation of the case and adjustments shall be made accordingly, if warranted.

      In an Order dated 22 June 2015, the ERC provisionally approved the Cash Incentive rate of PhP2.1007/kWh for SunWest Water and Electric Company, Inc. (SUWECO), subject to the condition that the rate shall be effective and applicable only on the subsequent cash incentive claims of SUWECO from receipt of the Order.

    3. EC
    4. NPC filed the following petitions before the ERC for the availment of the environmental share from the UC, which are still pending resolution by the ERC:

      ERC Case No. Date Filed Calendar Year Amount (In PhP)
      2014–021 RC 12 March 2014 2014 320,008,239.75
      2015-050 RC 12 March 2015 2015 426,875,421.95
      2016-019 RC 14 March 2016 2016 426,710,057.72
      Total 1,173,593,719.42

    5. Update on UC Imposition on Self Generation Facilities (SGFs)
    6. Pursuant to Section 7, Rule 18 of the EPIRA-IRR and DOE issuance dated 21 June 2007, deferment of UC Imposition on SGFs expired on 30 June 2010.

      PSALM, as administrator of the UC funds, submitted as part of its proposed amendments to the EPIRA, the exemption of Self-Generation Entities (SGE) with self-generation facilities (SGF) from the imposition of UC.

      PSALM submitted before the ERC on 9 March 2011 the proposed Guidelines and Procedures Governing the Imposition of the UC on SGFs (SGF Guidelines). In case the DOE issues a policy imposing UC on SGFs/SGEs, a Petition for Rule-Making shall be filed before the ERC for the purpose.

      On 13 February 2015, DOE-Electric Power Industry Management Bureau (EPIMB) and PSALM held a coordination meeting to discuss the issues raised above and the way forward on the imposition of UC to SGFs/SGEs.

      PSALM was informed by DOE-EPIMB during the 21 October 2015 meeting that DOE’s clarification/response on the issues raised will be sent to PSALM as soon as possible, however, as of this date DOE’s response is yet to be received by PSALM.

      On 03 December 2015, National Power Corporation, National Electrification Administration, PSALM, ERC, Manila Electric Company, and Bureau of the Treasury participated in a meeting with the Asia-Pacific Economic Cooperation (APEC) representatives that conducted Fossil Fuel Subsidy Peer Review. One of the topics discussed for the power industry was ME and exemption of SGF from UC.