Power Sector Assets and Liabilities Management Corp (PSALM) is seeking regulators’ approval to pass onto consumers some P3.69 billion in losses; these stemmed from contracts with independent power producers (IPPs).
The state-run firm has filed an application with the Energy Regulatory Commission (ERC) seeking provisional authority to recover the stranded contract cost (SCC) of P3.69 billion incurred in 2016.
If the petition is approved, the amount will be passed onto consumers through the universal charge (UC) at a rate of P0.0429 per kilowatt-hour (kWh). PSALM would then be able to pay off the loan obligations without resorting to refinancing.
“The amount, if collected, would enable Petitioner to recover SCC which can be used to service maturing loans and IPP obligations. Provisional approval of this SCC will also keep Petitioner from resorting to refinancing to service its maturing debts, thus reducing, if not totally eliminating, additional borrowing costs,” PSALM said according to a report by the Philippine Star.
In a previous petition, ERC had allowed PSALM allowed to collect P37 billion from consumers also under universal charges.
PSALM is created under the Electric Power Industry Reform Act of 2001 (EPIRA). The firm pays for its operations and Napocor’s debts and obligations through the privatization of generating assets, and electricity sales from assets and borrowings.