PSALM seeks ERC approval to recover NPC fuel expenses for Visayas clients

by Lenie LecturaJuly 7, 2016

from Business Mirror

THE Power Sector Assets and Liabilities Management Corp. (PSALM) is seeking regulatory approval to recover fuel and purchased power costs by the National Power Corp. (NPC) in the Visayas.

PSALM, tasked to privatize NPC’s power assets to help generate funds to pay off NPC’s debts, has applied before the Energy Regulatory Commission (ERC) for a P0.4367 per kilowatt-hour (kWh) rate increase for the Visayas.

However, for Luzon and Mindanao, it seeks to implement a refund of P1.7004 per kWh and P0.3660 per kWh, respectively.

PSALM proposed to implement the rate hike for the Visayas and the refund for Luzon and Mindanao for one year, according to the state firm’s application for the approval of True-Up Adjustments of Fuel and Purchased Power Costs (TAFPPC) and Foreign Exchange (TAFXA).

The application, PSALM’s sixth TAFPPC and TAFXA, covers the period January to December 2015.

In its application, PSALM explained that true-up adjustments allows it to either recover or refund the difference between the actual allowable costs incurred for a certain period and actual revenues generated.

“In the Luzon grid, considering Malaya Thermal Power Plant was not utilized to supply the energy requirement of Transition Supply Contract [TSC]/Contract for Supply of Electric Energy [CSEE] customers in view of its designation as a must-run unit in the Wholesale Electricity Sport Market pursuant to Department of Energy Circular 2014-01-003, its fuel costs were not considered in the Luzon grid’s AFC [Actual Fuel Cost],” said PSALM.

The AFC for the Visayas grid is zero, since none of the three fuel-fired plants, namely power barges (PBs) 101, 102 and 103 were not utilized to supply the energy requirements of TSC/CSEE customers for the relevant test period.

“The AFC for the Mindanao grid considered the fuel costs of PB 104, and that of independent power producers’ Southern Philippines Power Corporation and Western Mindanao Power Corp., as they supplied the energy requirements of TSC/CSEE customers,” PSALM said.