The Energy Regulatory Commission allowed Power Sector Assets and Liabilities Management Corp. to recover P12.477 billion from consumers to pay for the stranded debt of state-run National Power Corp.
The amount will translate into a power rate increase of P0.0163 per kilowatt-hour. The universal charge-stranded debt rate would rise from P0.0265 per kWh to P0.0428 per kWh.
“Accordingly, all distribution utilities and the National Grid Corp. of the Philippines are hereby directed to collect the amount of P0.0428 per kWh [replacing the existing UC-SD rate of P0.0265 per kWh] from the consumers starting the next billing period,” the ERC said.
It said the UC-SD would be remitted to PSALM, the agency mandated to manage the assets and liabilities of Napocor, on or before the 15th day of the succeeding month until the stranded debt true-up for 2011 and 2012 was fully recovered.
The Electric Power Industry Reform Act defines stranded debt as “any unpaid financial obligations of the National Power Corp. which have not been liquidated by the proceeds from the sales and privatization of Napocor assets.”
ERC also directed PSALM to create a special trust fund for the UC-SD and submit quarterly remittance reports and disbursements from the fund.
ERC acted on the motion for reconsideration filed by PSALM seeking to reinstate its total fuel and purchased power costs for 2011 and 2012 which was previously rejected by the regulator.
PSALM said it did not agree with the decision of the ERC which excluded fuel and purchased power costs associated with sales from the Wholesale Electricity Spot Market.
“The commission approves the reinstatement of fuel and PPC to the extent of P12.477 billion only, computed as the difference between the previous disallowance and the recomputed disallowance,” ERC said.
The P12.477 billion approved recovery amounted was lower than the P16.8 billion sought by PSALM.
ERC earlier allowed PSALM to recover from consumers P24.198 billion from the UC-SD covering 2011 and 2012 excluding the fuel and purchased power costs for the WESM.
The collection was spread over a nine-year period from July 2017 with a rate of P0.0265 per kWh which remains the UC-SD rate currently paid by consumers today.
PSALM said it continued to incur stranded debt and stranded contract cost because the proceeds from the privatization of Napocor and independent power producer generation assets were not enough to pay its contractual obligations with the eligible IPPs and lending institutions.
ERC vowed to fast-track the resolution of pending applications of PSALM for the recovery of UC-SD and stranded contract costs of Napocor.