MANILA, Philippines - Electricity rates may increase by roughly 15 centavos per kilowatt-hour instead of a previous estimate of 26 centavos per kwh if the Power Sector Assets and Liabilities Management Corp. (PSALM) pass on the damages sought by former employees of National Power Corp. (Napocor) to electricity consumers.
PSALM president Emmanuel Ledesma Jr. said the universal charge may increase by 15 centavos per kwh every month over a 10-year period should PSALM decide to recover the Napocor damages through an increase in the universal charge, a separate line in consumers’ electricity bills which is being charged to all electricity consumers.
Napocor lost a class suit filed by former members of its Drivers and Mechanics Association (DAMA), who were terminated in 2003. The firm was ordered to pay P62 billion in damages, according to a Supreme Court decision on June 30, 2014.
PSALM is still verifying and recalculating the amount.
Based on his latest estimate, Ledesma said the amount of damages sought by former Napocor employees could go down to P35 billion to P36 billion. Based on this amount, the increase in universal charge will only be 15 centavos per kwh instead of a previous estimate of 26 centavos per kwh.
“The estimate is 15 centavos from 26 centavos over 10 years,” Ledesma said. “We are recalculating it but my estimate is P35 billion to P36 billion.”
However, Ledesma said there is still no decision yet on whether the government corporation would indeed pass this on to consumers through an increase in the universal charge.
PSALM is the government corporation tasked to privatize state-owned power assets.
The Napocor petitioners comprised about 8,018 beneficiaries and based on their representation to the court, are claiming P60 billion in payables. The remaining amount represents legal fees.
In accordance with the Supreme Court’s decision, the Quezon City regional trial court issued notices of garnishment to PSALM for Napocor’s assets.
The Supreme Court has lifted the garnishment order slapped on PSALM but the government corporation would still need to settle the damages.
Ledesma said the lifting of the garnishment order is a welcome move as it would allow PSALM to continue operating plants and paying its debts.
At present, PSALM is responsible for the fuel supply and operations budget of its power plants such as the Malaya Thermal Power Plant in Luzon, Power Barges (PBs) 101, 102 and 104 and the Naga Coal-fired Thermal Power Plant (CFTPP) in Visayas.
In all, PSALM’s plants produce 430 megawatts in dependable capacity.
PSALM is also obliged contractually to provide for the fuel requirements of Independent Power Producer (IPP) plants, namely Ilijan Natural Gas Power Plant (NGPP) in Luzon, and Zamboanga Diesel Power Plant (DPP) and General Santos DPP in Mindanao, the government corporation said.
Push the ILP program
The Department of Energy (DOE), on the other hand, was urged to enlist the help of the Department of the Interior and Local Government (DILG) and local government units (LGUs) in securing private sector participation in its interruptible load program (ILP).
The program seeks to encourage big business establishments like malls and factories to run their own generators instead of getting their supply from the Luzon grid during the summer months of next year to avert rotating blackouts.
ILP participants would be reimbursed the cost difference between using electricity from the grid and running their generators.
Isabela Rep. Rodolfo Albano III said the DILG and LGUs are in the best position to identify and secure the participation of business establishments and industries in ILP to ease the projected power shortage in the summer months of next year.
“The DOE should vigorously push for the ILP program to maximize privately generated power supply that commercial and industrial establishments can produce on their own to reduce dependence on the national power grid during the March-to-June deficit period in 2015,” he said. – With Jess Diaz