by Lenie Lectura, 12 April 2015
THE Power Sector Assets and Liabilities Management Corp. (PSALM) dropped broad hints on Sunday about collecting a higher universal charge (UC) from consumers to address a funding gap.
As provided under Section 34 of the Elecric Power Industry Reform Act (Epira), the PSALM is authorized to impose such a charge from all end users to compensate for any remaining deficit.
The UC is a separate line item in the consumers’ electric bills. It has different subcomponents, depending on the utilization of the funds as specified in the UC collection.
PSALM President Emmanuel R. Ledesma Jr. refused to detail such adjustments, saying that the state firm has yet to finalize its numbers. He stressed, though, that this was allowed under the Energy Regulatory Commission (ERC) guidelines.
“PSALM shall file the annual true-up adjustments for both universal charge for stranded contract costs and universal charge for stranded debt. But we have yet to determine the figures upon approval of PSALM 2014 financial statements,” Ledesma said.
Under the Epira, UC collection from stranded contract costs may be used to plug the cost difference that the PSALM is unable to recoup from end-users relating to its supply contracts with the independent power producers (IPP).
PSALM pays for the debts incurred by the National Power Corp. (Napocor) aggregating P698.9 billion at end-2014.
Proceeds from the privatization of power assets reduced by 42 percent the financial obligations the PSALM assumed from the Napocor to P698.9 billion as of end-2014, from P1.2 trillion as of end-December 2000, inclusive of interest.
Broken down, the figure consisted of principal amount of P830.7 billion as of 2000, and interest amounting to P373 billion. PSALM has reduced the principal by 30 percent (P248.5 billion) to P582.2 billion and likewise decreased the interest payable by 69 percent (P256.3 billion). The remaining interest until the debt maturity still amounts to about P116.7 billion.
At end-2014, PSALM’s privatization activities generated P916.2 billion of which P420.1 billion had been paid to PSALM, while P471.5 billion remains to be collected. The balance of P24.6 billion accounts for the reduction arising from foreign-exchange fluctuations and contractual adjustments.“Decreasing the Napocor loan and IPP obligations is expected with PSALM’s privatization of Napocor’s generating assets and IPP contracts. Proceeds from the sale were used to repay said obligations,” NapocorPresident Ma. Gladys Cruz-Sta. Rita said.