Power rate hike looms

MANILA, Philippines - Consumers will face additional power charges of P0.0531 per kilowatt-hour if the Energy Regulatory Commission (ERC) approves a petition filed by the Power Sector Assets and Liabilities Management Corp.

PSALM, the government agency tasked to privatize state-owned power assets, is seeking authority to charge and collect the universal charge for stranded cost amounting to P4.078 billion for 2013.

Slapped on all electricity consumers, the universal charge is a separate line in electricity bills, accounting for roughly 2.48 percent of the total power cost.

This refers to the excess of the contract cost of electricity under eligible contracts over the actual selling price of the contracted energy output of such contracts in the market, as defined under the Electric Power Industry Reform Act of 2001 (EPIRA).

According to the ERC, the contracts of independent power producers that are eligible for recovery under the universal charge for stranded costs are Benguet mini hydro power plants, Pagbilao 1 and 2, Sual 1 and 2 and Unified Leyte.

ERC executive director Saturnino Juan said regulators have yet to look into PSALM’s latest petition and it could take a year before the commission can hand down its decision.

To date, PSALM has a pending application to recover P17.685 billion for the stranded contract costs of National Power Corp., a move aimed at avoiding any new debts.

The pending application covers 2011 and 2012 with costs to be recovered over a two-year period. This is equivalent to P0.1274 per kwh under the universal charge for stranded contract costs.

The latest application approved by the ERC early this year was PSALM’s petition to recover the stranded contract costs of the National Power Corp. from 2007 to 2010.

ERC allowed PSALM to charge P0.1938 per kwh to recover P53.851 billion in stranded costs.

FPI wants to sell generating capacities to gov’t

Meanwhile, the Federation of Philippine Industries (FPI) is open to helping address the country’s power supply problem by selling its members’ generating capacities to the government.

In a statement yesterday, FPI chairman Jesus Arranza said the group’s members are willing to assist the government in solving the energy problem.

In particular, FPI is calling on the government to invoke the emergency power in Section 71 of EPIRA that states that the President, upon determination of an imminent shortage of supply of electricity, may ask Congress for authority to establish additional generating capacity.

“FPI proposes that the government contracts the generating capacities of its members,” the group said.

“Likewise, the government shall thereupon be responsible for the management of the contracted capacities, including its dispatch and handles the collection and timely remittance of a mutually acceptable fixed per kwh payment,” the group added.

Arranza said that since FPI members are engaged in manufacturing, they have no intention of selling in the Wholesale Electricity Spot Market as it is not their expertise.

If this is immediately laid down and implemented, this joint public-private partnership could very well prepare the country for the imminent power problem, he added.

Earlier, the European Chamber of Commerce of the Philippines (ECCP) said the government should adopt a policy that will encourage investments in energy efficiency by providing incentives and imposing penalties.

“National government and LGU (local government unit) leaders are called upon to create an environment where investment in energy efficiency is strongly encouraged by offering a ‘carrot and stick’ policy: incentives for those who make the right move and penalties for those who need to be pushed into energy efficiency,” ECCP vice president for external affairs Henry Schumacher said.

He also noted that imposing penalties is needed to support energy supply for economic growth.

The recommendation was given amid concerns on the power supply situation in the country. With Louella Desiderio