PSALM adjusts possible hike in universal charge due to class suit

MANILA, Philippines - The Power Sector Assets and Liabilities Management Corp. (PSALM) has recalculated the possible increase in the universal charge if it is forced to settle up to P62 billion in damages from a class suit filed by the former drivers and mechanics of National Power Corp. (Napocor), the state-owned power company.

From a previous estimate of a 51 centavo per kilowatt-hour increase in the universal charge, PSALM is now looking at increasing the universal charge by 23 centavos per kwh for recovery period of 11 years and 22 centavos per kwh for a 12- year recovery.

However, PSALM president Emmanuel Ledesma Jr. stressed there is still no decision yet on whether or not the agency would indeed pass on to consumers the P62 billion in damages sought by the former employees of Napocor through an increase in the universal charge.

The universal charge is a separate line in consumers’ electricity bills. It is being charged to all electricity consumers.

PSALM is the government corporation tasked to privatize state-owned power assets.

“If there is indeed any amount due, the Supreme Court mentioned the universal charge but we will coordinate with other agencies,” Ledesma said.

Napocor lost a class suit filed by former members of its Drivers and Mechanics Association (DAMA) who were terminated in 2003 and is being asked to pay P62 billion in damages, according to a Supreme Court resolution dated June 30, 2014.

The petitioners comprised about 8,018 beneficiaries and based on their representation to the court, are claiming P60 billion in payables.  The remaining amount represents legal fees.

In accordance with the Supreme Court’s decision, the Quezon City Regional Trial Court’s sheriffs issued notices of garnishment to PSALM.

But on Tuesday, the Supreme Court lifted the garnishment order slapped on PSALM.

Ledesma said the lifting of the garnishment order is a welcome move as it would allow PSALM to continue operating plants and paying its debts.

At present, PSALM is responsible for the fuel supply and operations budget of its power plants such as the Malaya thermal power plant in Luzon, Power Barges (PBs) 101, 102 and 104 and the Naga coal-fired thermal power plant in Visayas.

In all, PSALM’s plants produce 430 megawatts in dependable capacity.