THE proceeds generated from the transfer of the management of the National Power Corp.’s (Napocor) contracted capacities to independent power-producer administrators (IPPA) amounting to $3.23 billion would substant0ally reduce the universal charge passed on to consumers to recover the state-owned generation firm’s stranded debts.
This was the claim made by the Power Sector Assets and Liabilities Management Corp. (Psalm) on Wednesday when it announced this was what their computations showed on the P470-billion stranded debts covering a 20-year period starting in 2009 to be collected in a span of 17 years.
On June 30, Psalm filed a levelized universal charge on stranded debts (UC-SD) application to recover the P470-billion stranded debts. At the time of application, there was no successful appointment of IPPAs yet. Accordingly, the P470-billion projected UC-SD does not include any anticipated proceeds from the selection of IPPAs.
Pending the Energy Regulatory Commissions (ERC) resolution on the levelized UC application, Psalm, in compliance with the ERC guidelines, filed the 2010 UC-SD application on June 29 amounting to P54.89 billion covering the period January to December 2010. This is not on top of the P470-billion UC-SD application, but is an update of the forecast UC-SD for 2010 only.
Psalm said that for the 2009 filing, the UC-SD for 2010 was P67.33 billion. The P12.44-billion reduction in the 2010 UC-SD reflects the impact of the privatization, prepayments, and IPPA proceeds that Psalm has implemented and generated.
Psalm said the amount of the UC-SD to be collected from electricity consumers would further be reduced upon the completion of the sale of the remaining generation assets of Napocor and the appointment of IPPAs.
Psalm made it clear the UC applications did not include performance incentives as erroneously reported elsewhere. Performance incentives, although components of the operating expenses, were never part of the UC-SD applications to recover the stranded debts of Napocor.
By law, the UCSD for stranded debts, through the Electric Power Industry Reform Act, is a legal way of liquidating the debts of Napocor.
