PSALM woes to hike rates

by Alena Mae S. Flores, 12 April 2015
from Manila Standard Today

Power rates are expected to go up as consumers will have to shoulder the P227.4-billion funding shortfall of Power Sector Assets and Liabilities Management Corp., which manages the country’s energy assets.

PSALM president Emmanuel Ledesma Jr. earlier said given the agency’s P698.9-billion outstanding financial obligations and P471.5 billion in privatization receivables, the company had a funding shortfall of P227.4 billion.

“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’s 2014 financial statements,” Ledesma said.

PSALM’s filing for adjustments is expected to increase power rates under the universal charge component of the power bill of consumers.

Ledesma said the adjustment is allowed under the guidelines of the Energy Regulatory Commission. Any filing for universal charge recovery should be approved by the regulator.

PSALM said the government’s privatization program had helped reduce the financial obligations it assumed from National Power Corp. by 42 percent to P698.9 billion as of end-2014 from P1.2 trillion as of end-December 2000.

“Broken down, the figure consists 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,” Ledesma said.

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