MANILA, Philippines --- Filipino consumers nationwide will be subjected to a rate hike of P0.1938 per kilowatt hour (kWh) to be reflected as universal charge (UC) in their electric bills starting next month due to the stranded contract costs (SCC) recovery of liability-stricken Power Sector Assets and Liabilities Management Corporation.
For the typical residential customers with 200-kilowatt hour monthly consumption, the added charge on their bills will be P38.76 a month, according to the Energy Regulatory Commission (ERC).
The approved rate is lower by roughly P0.17 per kWh compared to the P0.3666 per kWh applied for by PSALM in 2011. However, this still poses a considerable burden to Filipino consumers in the remainder of PSALM's corporate life or until 2026.
The rate hike is separate from the P0.03 per kWh being recouped by PSALM for its stranded debts.
Based on its filing with the ERC, PSALM calculated its accrued stranded contract costs at P74.298 billion from 2007 to 2010. But the ERC, in its ruling, limited its cost recovery at just P53.581 billion, which meant that more than P20 billion was disallowed from being passed on to consumers.. Together with the stranded debts, the UC recoveries petitioned for by PSALM totaled P140 billion.
The ERC said it will issue a separate decision on PSALM's application on UC for stranded debts, or those which should have represented costs not fully recovered from its proceeds of power assets privatization.
UCs are non-bypassable charges which are allowed for recovery under the Electric Power Industry Reform Act (EPIRA). The law, however, was clear that only prudently-incurred costs must be passed on as UC charges in the consumers' electric bills.
The ERC forthrightly stated that "all electricity consumers are liable to pay this charge to their respective distribution utilities or to the grid operator for the directly-connected customers, which in turn, shall remit it to PSALM as administrator of the UC fund."
"After a judicious review, the ERC approved only the amount of P53.581 billion for recovery from the UC," the Commission said.
It added that "the ERC rejected PSALM's calculation of NPC's (National Power Corporation) stranded contract costs insofar as it failed to take into account the additional revenues to be realized by PSALM from the eligible contracts of NPC with the independent power producers (IPPs) under PSALM's pending applications for adjustments in generation rates."
The UC for stranded contract cost shall refer to "the excess of the contracted cost of electricity under the eligible contracts of NPC with IPPs over the actual selling price of the contracted energy output of such contracts in the market."
Beyond these cost recoveries, PSALM is still allowed to file for true-up adjustments.
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