By Lenie Lectura – June 13, 2019
from Business Mirror
THE Energy Regulatory Commission (ERC) has authorized the Power Sector Assets and Liabilities Management Corp. (PSALM) to recover P5.117 billion from consumers to pay for the stranded debt of the National Power Corp. (NPC).
“The petition filed by PSALM for the recovery of the NPC’s Stranded Contract Costs [SCC] of the Universal Charge [UC] is hereby approved with modification,” the ERC said in its 52-page decision.
The approved amount will translate into a power-rate increase of P0.0543 per kilowatt-hour (kWh). The amount would be collected for 12 months. “Accordingly, all distribution utilities and the National Grid Corp. of the Philippines are hereby directed to collect from the consumers the above UC-SCC charge starting the next billing period upon receipt of this order for a period of 12 months,” the ERC added.
PSALM had originally applied for P7,354,563,448.91 worth of UC-SCC for 2014, equivalent to P0.0907 per kWh covering a one-year period.
“The resulting rate is lower than the rate of recovery proposed by PSALM,” the ERC said. “In arriving at the corresponding rate for the recovery of UC-SCC, the Commission considered impact to customers and effect of the recovery period.”
The Electric Power Industry Reform Act defines stranded debt as “any unpaid financial obligations of the National Power Corp. which have not been liquidated by the proceeds from the sales and privatization of NPC assets.”
SCC, meanwhile, refers to the excess of the contracted cost of electricity under eligible Independent Power Producers (IPP) contracts of NPC over the actual selling price of the contracted energy output of such contracts in the market.