PSALM seeks ERC approval for true-up rates adjustment

By Lenie Lectura – June 29, 2017

from Business Mirror

Power rates in Luzon may go down by P0.556 per kilowatt-hour (kWh) should the Energy Regulatory Commission (ERC) approve the adjustment in the fuel and foreign exchange costs of the Power Sector Assets and Liabilities Management Corp. (PSALM).

Electricity rates in Mindanao may also go down by P0.834 per kWh, but rates in the Visayas may increase by P1.067 per kWh.

The seventh application for the true-up adjustments of fuel and purchased power costs and foreign-exchange related costs  filed by PSALM before the ERC covers the one year period between January and December 2016.

PSALM seeks to implement the refund for Luzon and Mindanao and the recovery for the Visayas in one year.

“It is most respectfully prayed to this Honorable Commission that consistent with ERC Resolution 19 Series of 2009 as amended, adopting the Rules for the Automatic Recovery of Monthly Fuel and Purchased Power Costs and Foreign Exchange-Related Costs by the National Power Corp., and Section 4 [e], Rule 3 of the implementing Rules and Regulations of Epira [Electric Power Industry Reform Act], the following total TAFPPC per grid and corresponding True-up Adjustment rates with one-year refund period for the Luzon and Mindanao grids and one-year recovery period for the Visayas grid covering the test period from January 2016 to December 2016 be approved,” PSALM’s application read.

PSALM explained that such application for true-up adjustments is being sought to allow it to recover or refund the difference between the actual allowable costs incurred for a certain period and actual revenues generated.

For the fuel and purchased power cost, the application covers the costs incurred and revenues generated by PSALM from the Malaya Thermal Power Plant in Luzon; Unified Leyte Plants in the Visayas; Power Barge 104 and Southern Philippines Power Corp.’s  55-megawatt plant in Mindanao.

For foreign-exchange related costs, these are computed based on the difference between the principal debt payments made during the test period converted into Philippine peso using the actual exchange rate as of payment date and using the ERC-approved base foreign exchange of P44.0494 to a dollar.