15 Aug 2010
There is no hidden cost in the petition for Universal Charge for Stranded Debt (UC-SD) filed by the Power Sector Assets and Liabilities Management (PSALM) Corporation with the Energy Regulatory Commission (ERC).
Thus reiterated PSALM amid persistent inaccurate reports that performance incentives and compensation received by PSALM personnel were tucked into the UC-SD petition pending before the ERC.
In petitioning for the UC-SD, PSALM applied relevant provisions of the Electric Power Industry Reform Act (EPIRA) and ERC Resolution No. 04, series of 2007, neither of which permit recovery of PSALM's incentives and compensation through the UC.
Under Section 6, Article V of the ERC Resolution, the annual Stranded Debts of National Power Corporation is equivalent to the Gross Annual Debt Service (GADS), net of the Projected Cash Inflows, National Government Absorption, and Surplus/Shortfall, if any, in the Special Trust Fund from the Universal Charge.
As provided in the ERC Resolution, projected cash inflows will include projected net cash flow from operating and investing activities of National Power (excluding SPUG and PSALM). Thus, included in the UC-SD are expenses attributable to un-privatized plants such as fuel-related costs, plant operation and maintenance costs, National Power-Head Office allocated costs, and plant personnel cost of National Power - not of PSALM.
PSALM's UC-SD petition is being evaluated by the ERC. PSALM encourages consumers to keep track of hearings on the matter. Documents related to the UC-SD are available from ERC's Web site or the ERC office.
Corporate Communications Division