19 Jun 2011
Complying with the deadline set by the Energy Regulatory Commission (ERC), the Power Sector Assets and Liabilities Management (PSALM) Corporation is currently finalizing the amounts of the stranded debts (SD) and the stranded contract costs (SCC) of the National Power Corporation (NPC) to be recovered through the Universal Charge (UC).
PSALM President and Chief Executive Officer Emmanuel R. Ledesma, Jr. mentioned that in filing the UC applications in time for the 30 June 2011 deadline, PSALM will follow the revised guidelines released by the ERC on 07 March 2011. The initial filing was originally set on 15 March 2011, but since the amended guidelines were released only a week before the deadline, the ERC accordingly extended the deadline for filing upon PSALM's request.
PSALM is mandated under Republic Act No. 9136, the Electric Power Industry Reform Act (EPIRA), to calculate the amount of the SD and SCC of NPC. After an extensive review of PSALM's UC-SD and SCC applications, the ERC will determine, fix, and approve the UC to be collected from electricity consumers.
As part of determining the SD and SCC amounts, PSALM recently conducted a series of workshops aimed at educating stakeholders and partner agencies on the dynamics of the UC, and at soliciting ideas and opinions on interpreting the amended guidelines for the SD-SCC computation.
Sponsored by the Asian Development Bank (ADB), the workshops were attended by representatives from the Department of Finance, the NPC, the Department of Energy, the National Economic and Development Authority, the Bangko Sentral ng Pilipinas, and the Department of Budget and Management. The ADB stressed that the collection of the UC, which is a viable way of settling the debts of NPC, must be a concerted effort of all involved agencies to considerably ease the financial obligations of the Philippine government.
Ledesma said that with the collection of the UC, coupled with the privatization of the remaining power assets, PSALM's debt obligations may significantly be reduced from an estimated USD3.78 billion by the end of its corporate life.
To soften the impact of the UC collection on electricity consumers, Ledesma stated that options, such as spreading out its implementation over a number of years, are also being explored.
The EPIRA defines stranded debts as any unpaid financial obligation of NPC that has not been liquidated by the proceeds from the privatization of NPC's assets. Stranded contract costs, on the other hand, are defined as the excess of the contracted cost of electricity under eligible contracts over the actual selling price of the contracted energy output of these contracts in the market.
Strategic Communications and Partnership Division |