ERC denies PSALM appeal to collect new universal charge

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The Energy Regulatory Commission (ERC) rejected the motion for reconsideration sought by state-owned Power Sector Assets and Liabilities Management Corporation (PSALM) to recover a total of Php10.843 billion from consumers to pay for the debts incurred by the National Power Corporation (NAPOCOR).

Based on the order promulgated by the commission last March 29, the commission said it denied PSALM’s appeal filed in September 2020 for lack of merit, emphasizing that it did not find any compelling reason to reverse its order last May 28.

Back then, the ERC directed PSALM to stop collecting universal charges (UC) for stranded contract costs (SCC) and standed debts (SD) amounting to P0.2536 per kilowatt-hour (kWh).

The commission then denied PSALM’s petition for 2018 UC-SCC amounting to Php6.12 billion and for the 2018 UC-SD amounting to Php4.72 billion. 

SCCs refer to the additional contracted cost of electricity under qualified independent power producer contracts over the actual selling price of the contracted energy output. Meanwhile, SDs refer to the unpaid financial obligations of NAPOCOR that have yet to be liquidated by the proceeds from its assets. 

The ERC said that under Republic Act 11371 or the Murang Kuryente Act (MKA), it can no longer order the collection of new SCCs and SDs since the law’s Implementing Rules and Regulations took effect on May 5 last year.