State-run Power Sector Assets and Liabilities Management Corp. said it is set to file a petition with the Energy Regulatory Commission this week to recover another P10.842 billion worth of universal charges for stranded contract costs and stranded debt.
The petition once approved, would increase power rates by P0.125 per kilowatt-hour, on top of the existing universal charges.
“We are timely filing new petitions for UC-SCC amounting to P6.12 billion or equivalent to P0.062 per kilowatt-hour and for UC-SD amounting to P4.722 billion equivalent to P0.063 per kWh,” PSALM president Irene Garcia said during the company’s 18th-anniversary celebration.
The Electric Power Industry Reform Act of 2001 defines the stranded contract costs of National Power Corp. as the “excess of the contracted cost of electricity under eligible contracts over the actual selling price of the contracted energy output of such contracts in the market.”
Stranded debts, meanwhile, are defined as “any unpaid financial obligations of Napocor which have not been liquidated by the proceeds from the sales and privatization of Napocor assets.”
Garcia said the UC-SD and UC-SCC, which cover the year 2018, carry a recovery period of seven years and one year, respectively. The petitions will be filed separately.
“The reason why we need to file this is that if we don’t file it, we will be forfeiting the opportunity and there is deadline which is June 30,” she said.
Garcia said PSALM was diligent in meeting the annual deadline for the filing of the universal charge petition.
“Thankfully with diligent efforts to follow up with the ERC, PSALM was able to recently secure approval for UC-SCC amounting to P0.0543 per kWh,” the official said.
The recently approved petition which was expected to be implemented in August would bring PSALM’s UC-SCC to P0.0971 per kWh from P0.0428 per kWh.
“This is just a filing of the petition and it can still be included in the Murang Kuryente Bill if they were able to come up with IRR and we start already with the funding from the Malampaya,” Garcia said.
The Murang Kuryente Bill, which is set for signing by President Rodrigo Duterte, will utilize the Malampaya funds to eliminate the UC-SCC and UC-SD amounting to about P200 billion.
Garcia clarified that PSALM would not become debt-free once the bill was signed into law.
“I will not say that we are debt free because the idea is to continue the activities of PSALM to privatize, raise money to be able to fund. It is really just the shortfall that’s being covered…Hopefully, there will be no new debts and will not incur additional debts. As the [debt] maturities are arriving, we will be able to settle them,” the official said.
Garcia said PSALM’s debts were reduced to P433.7 billion from a high P1.24 trillion that the agency had to absorb from Napocor.
She said PSALM faced a difficult year in 2019 because of peso depreciation which caused the agency to register net forex losses of P13.4 billion.
“Notwithstanding these forex losses, we managed to still remit P31.5 billion in debt payment and P29.1 billion for IPP obligations or a total of P60.6 billion payment for principal obligations alone and P14.4 billion payment of interests,” Garcia said.