World Bank, Asian Development Bank urged to review Napocor privatization

A consumer group is asking the World Bank and the Asian Development Bank to assess and evaluate the privatization of the National Power Corp.’s generation assets by the Power Sector Assets and Liabilities Management Corp. (PSALM).

PSALM, a government-owned-and-controlled corporation, was created by the Electric Power Industry Reform Act of 2001 (EPIRA) for the principal purpose of managing the orderly sale, disposition and privatization of Napocor’s generation, real estate and other disposable assets.

In a letter to the WB and ADB, National Association of Electricity Consumers for Reforms (Nasecore) president Pete Ilagan complained that despite the continued privatization, the cost of electricity has gone up, putting the consumers at a “loss.”

Ilagan noted that while “PSALM claims success in its ongoing privatization efforts as far as being able to optimize the value of the Napocor assets,” it and Napocor have recently filed with the Energy Regulatory Commission an application seeking for a rate increase, citing financial difficulty.

PSALM and Napocor wanted to jack up its generation charge by 17.2 centavos per kilowatthour in Luzon and P2 per kwh in Visayas.

“This puts us, the consumers, at a loss,” said Ilagan.

ADB and WB are both major creditors of Napocor.

Since electricity consumers are shouldering all the costs and debt repayments of Napocor, Ilagan said that they should also be consulted on policies governing Napocor’s operations and privatizations.

On the other hand, Nasecore is a non-government organization that has been at the forefront of educating and protecting electricity consumers.

PSALM has so far sold more than 50 percent of Napocor’s generating assets in Luzon and the Visayas.