PSALM to recover P8.5 B power spot market purchases

MANILA, Philippines — State-run Power Sector Assets and Liabilities Management Corp. (PSALM) is cleared to recover P8.5 billion through the universal charge for stranded contract cost (UC-SCC) for purchased electricity from the spot market.

In an order, the Energy Regulatory Commission (ERC) has authorized PSALM to collect the under-recovery of UC-SCC amounting to P8.54 billion, which represents purchased electricity from the wholesale electricity spot market (WESM) for station use of the plants and their substation for calendar years (CY) 2007 to 2010.

Broken down, PSALM purchased P5.76 billion worth of supply for default wholesale supply (DWS) customers and P2.79 billion worth of supply for transition supply contract (TSC) customers.

The ERC allowed the state-run firm to continuously implement the UC-SCC rate of P0.1938 per kilowatt-hour (kwh) for a period of six months or “until such time that the full amount shall have been recovered.”

There will be no change in consumers’ electricity bills since PSALM will only extend the implementation of the same rate to grid customers.

The amount is an additional recovery from CY 2007 to 2010 amounting to P53.85 billion, which was previously granted by the ERC in January 2013.

In approving the application of PSALM, the ERC said the costs incurred in procuring power from WESM to supply the energy requirements of its TSC and DWS customers should be considered in the calculation of the recoverable SCC.

“It is significant to note that the purchased energy from WESM was delivered to its customers and PSALM derived revenue from supplying this energy to its DWS and TSC customers,” it said.

SCC refer to the excess of National Power Corp.’s (Napocor) contracted cost of electricity with independent power producers over the actual selling price of the output.

PSALM, the entity created under Republic Act 9136 or the Electric Power Industry Reform Act of 2001, is allowed to recover through UC the payment of Napocor’s stranded debt and SCC.