PSALM’s universal charge collections reach whopping P58B

by Myrna Velasco, 06 April 2015
from Manila Bulletin

The universal charge (UC) collection of the Power Sector Assets and Liabilities Management Corporation (PSALM) already reached a whopping P58.1 billion as of early part of fourth quarter last year.

Nevertheless, it was indicated that it has been immensely remitting its UC collections to the National Power Corporation (NPC) – totaling P57.4 billion by October, 2014.

PSALM has reported to the Department of Energy (DOE) that out of the total P58.1 billion UC amounts fetched from all electricity ratepayers, “P57.4 billion was disbursed to the NPC-SPUG for missionary electrification, environmental charge and stranded contract cost in accordance with the provisions of the EPIRA (Electric Power Industry Reform Act).”

Under EPIRA’s provision, it was stipulated that UC collections from stranded contract costs shall be utilized to plug the cost difference that PSALM would not be able to recoup from end-users relating to its supply contracts with the independent power producers.

PSALM eventually stated that P17.4 billion was transferred from the UC stranded contract cost to a special trust fund which is in keeping with the disbursement guidelines purportedly approved by the PSALM Board.

However, the company failed to reconcile such information with its statement of P57.4 billion disbursements to NPC for electrification program.

PSALM further noted that it gained P0.139 billion as interest charges on UC collections. Yet following the disbursements undertaken, the UC trust fund reportedly just had a balance of P0.959 billion.

Just for the period from May to October, 2014, PSALM noted that it received total UC remittances of P10 billion and had correspondingly disbursed P3.119 billion to NPC for missionary electrification.

As could be gleaned from data submitted to the energy department, the UC collections for missionary electrification had just been at P39.219 billion as of October 2014; while those for environmental charge reached P1.456 billion.

There had been added UC cash stream from renewable energy developer cash incentive (REDCI) which is intended also for the missionary electrification of NPC’s Small Power Utilities Group (NPC-SPUG) amounting to P0.064 billion.

All three UC collections are for remittances to state-run NPC, but with specific exception to the UC for stranded contract costs which is for PSALM to manage and utilize to settle outstanding obligations on remaining power purchase deals.

PSALM further noted that it gained P0.139 billion as interest charges for UC collections. Yet following the disbursements undertaken, the UC trust fund reportedly just had a balance of P0.959 billion.

For cash incentive on RE-based electrification ventures along SPUG areas, it was noted that a significant P0.033 billion was paid by Romblon Electric Cooperative Inc., developer of the Cantingas mini-hydro power plant in Romblon.

The universal charge is a separate line item in the consumers’ electric bills. It has different sub-components depending on the utilization of the funds as specified in the UC collections.

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