Higher power bills expected in next 3 months

MANILA, Philippines - Consumers may have to pay higher power bills within the next three months once the Energy Regulatory Commission (ERC) approves the universal charge (UC) application of the Power Sector Assets and Liabilities Management Corp. (PSALM).

ERC executive director Francis Saturnino Juan said they would act upon the PSALM application filed last June 28 within the next 75 days.

“Not earlier than 30 days - we cannot act and we cannot issue. We can issue after 30 days from filing but not beyond 75 days also,” he said.

He said they would soon be conducting public consultation for PSALM’s UC petition.

“We will be issuing a notice of hearing for PSALM’s application for UC. But there’s also a prayer for provisional authority, so we will be evaluating that application for issuance of provisional relief in this application and see if there is merit for this additional relief being asked for,” he said.

While Juan admitted that it would still be up to the ERC to rule on the merits of the UC application of PSALM, they would need to come up with a decision soon on the provisional authority application filed by PSALM.

“We do not have a timeframe. But of course we have to follow the implementing rules, that we cannot act on the application or issue any provisional relief not earlier than 30 days from filing,” he said.

He said they have not decided yet on any date for the release of the decision on the UC.

“We don’t have any commitment. We accepted the filing as it is mandated also by law that we act on the UC filing of PSALM. And we will treat it like any other case, after filing and if there is prayer for provisional authority we will evaluate that prayer and if there is merit the Commission may grant it, but of course the rates will depend on the supporting documents to be presented,” he said.

PSALM has filed for a petition to collect 39 centavos per kilowatthour (kwh) of UC from consumers.

PSALM determined the final amounts for the UC-stranded debt (UC-SD) at three centavos kwh to be collected over a 15-year recovery period.

For the UC-stranded contract costs (UC-SCC), PSALM will apply to collect 36 per kwh over a four-year period in accordance with formulas prescribed under the revised guidelines issued by the ERC. 

The Electric Power Industry Reform Act (EPIRA) provides that a universal charge will be imposed on all electricity end-users for the payment of stranded debt and stranded contract costs of the National Power Corp.(Napocor).

The ERC will determine, fix and approve the UC to be collected from electricity consumers after an extensive review of PSALM’s applications.

The EPIRA defines stranded debts as any unpaid financial obligation of Napocor that has not been liquidated by the proceeds from the privatization of the generating firm’s assets, and stranded contract costs as the excess of the contracted cost of electricity under eligible contracts over the actual selling price of the contracted energy output of these contracts in the market.