The Energy Regulatory Commission has allowed Power Sector Assets and Liabilities Management Corp. to continue the collection of universal charge for stranded contract cost of P0.1938 per kilowatt-hour until the remaining under-recovery amounting to P5.476 billion is fully recovered.
“The Commission hereby authorizes PSALM to continuously implement the UC-SCC rate of P0.1938 per kWh until the approved amount of P53.851 billion UC-SCC is fully recovered,” the ERC said.
The regulator acted on the petition of PSALM filed for the availment of National Power Corp.’s stranded contract cost portion of the universal charge for 2007 to 2010.
The stranded contract costs of Napocor, as defined under the Electric Power Industry Reform Act of 2001, refer to the “excess of the contracted cost of electricity under eligible contracts over the actual selling price of the contracted energy output of such contracts of such contracts in the market.”
PSALM was previously allowed to implement a recovery of P53.851 billion under the universal charge for stranded contract cost from April 1, 2013 to December 31, 2015, but only P48.375 billion has been recovered to date, thus leaving an under-recovery of P5.476 billion.
The ERC order did not specify the period for recovery of the P53.851 billion but PSALM said it assumed a four-year recovery considering that the Energy Department’s Power Development Plan covers a four-year period.
PSALM said the four-year period would expire on February 2017 and asked the commission to allow it to continue to recover the P0.1938 per kWh until the approved P53.851 billion is fully recovered.
“Uninterrupted implementation of the P0.1938 per kWh approved UC-SCC rate would ensure continuous revenue streams for the petitioner… If the collection is discontinued, the petitioner will be forced to resort to borrowings to refinance portion of its maturing obligations which cannot be covered by its privatization proceeds and revenues from operations,” PSALM said.