The Energy Regulatory Commission (ERC) has denied a motion for reconsideration sought by the Power Sector Assets and Liabilities Management Corp. (PSALM) to recover a total of P10.843 billion from consumers to pay for the debts incurred by the National Power Corp. (NPC).
The ERC, in an order promulgated last March 29, stood by its May 2020 decision, as “it finds no merit in the motion.”
“The Commission finds no cogent reason to disturb its order dated May 28, 2020. Wherefore, the foregoing premises considered, the Motion for Reconsideration dated September 4, 2020 filed by PSALM on September 7, 2020 is hereby denied for lack of merit,” the agency ruled.
The ERC denied PSALM’s petitions for 2018 Universal Charge-Stranded Contract Costs [UC-SCC] amounting to P6.12 billion or equivalent to 6.2 centavos per kilowatt-hour [kWh] and for the 2018 Universal Charge-Stranded Debts [UC-SD] amounting to P4.722 billion or equivalent to 63 centavos per kWh.
SCCs are the excess of the contracted cost of electricity under eligible independent power producer contracts over the actual selling price of the contracted energy output.
SDs are unpaid financial obligations of the NPC that have not been liquidated by the proceeds from the sales and privatization of its assets.
The ERC is no longer allowed to order the collection of new SCC and SD from the time the Implementing Rules and Regulations (IRR) of the Murang Kuryente Act (MKA) took effect in May last year.
“Considering that the IRR of the MKA took effect on May 5, 2020, it is axiomatic that the Commission is no longer allowed to order the collection of new UC for SCC and SD, from the time onwards,” the commission said.
Under the MKA, a budget of up to P208 billion-representing the government’s share from the Malampaya Gas-to-Power Project-has been set aside pay for these charges.
PSALM raised its concern that the Malampaya fund may turn out to be insufficient to cover the SCC and SD and anticipated shortfall in the course of payment of all of PSALM’s liabilities. However, the ERC said these are “mere conjectures and speculations.”
“Considering the explicit provisions of Section 4 of the MKA that the Malampaya Fund shall be utilized for the payment of the remaining SCC and SD, and that any anticipated shortfall shall be included in the Government Appropriations Act; as well as the expressed directive under Section 7 of the same law that no new collection for a UC for SCC and SD shall be allowed, the Commission can no longer approve any application for the collection of SCCs and SDs, whether the application is pending or new. Thus, archiving the petition as prayed by PSALM is superfluous as it no longer serves a purpose,” the ERC ruled.
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