PSALM to ERC: Increase Napocor rate by P1
MANILA – The Power Sector Assets and Liabilities Management Corp. (PSALM) has asked the Energy Regulatory Commission (ERC) to increase the power rates of the National Power Corp. by P1 per kilowatt hour.
The Philippine News Agency said in a report that PSALM wanted to recover from the consumer the stranded costs amounting to P27 billion and stranded contract debts worth P55 billion.
Stranded contract costs are 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.
Stranded debts, on the other hand, are any unpaid financial obligations of Napocor which have not been liquidated by the proceeds from the sale and privatization of Napocor’s assets.
PSALM, in its petition to the ERC, proposed to recover the 19 centavos stranded contract costs in Luzon within three years.
It sought for an increase of P0.87 per kWh in Luzon, Visayas and Mindanao over the same period for its stranded contract debts.
PSALM earlier filed a petition with the ERC to recover P471 billion worth of stranded debts for 25 years at P0.23 per kwh.
Apart from the P471 billion stranded debts, PSALM also asked ERC for the recovery of P22 billion for its stranded debts for a period of five years at P0.09 per kWh.
Consumers will pay the stranded contract costs and debts through the universal component of the electric bill.
Under the Electric Power Industry Reform Act of 2001, PSALM was mandated to privatize Napocor’s assets with the objective of liquidating Napocor’s debts.
At least 90 percent of Napocor’s generating assets and 68 percent of the contracted capacities of its independent power producers have been privatized by PSALM.
