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Lawmaker: PSALM should withdraw power rate hike petitions


A neophyte lawmaker on Tuesday asked the Power Sector Assets and Liabilities Management Corp. (PSALM) should withdraw its petitions to increase power rates by P1.4525 per kilowatt hour until it can explain what happened to the money from the privatization National Power Corp. Eastern Samar Rep. Ben Evardone said that the privatization of 91.8 percent of Napocor assets generated $10.6 billion. Of the amount, $3.39 billion was realized from the sale of 25 generating plants, $44.5 million from assets turned over to independent power producers, $7.3 million from decommissioned power plants, $3.95 billion from the concession of National Transmission Corp. or TransCo, and $3.229 billion from the transfer of Napocor-IPP contracts to an independent power producer administrator. From May 2009 to April 2010, PSALM obtained $2.8 billion in new loans but paid only $1.3 billion of Napocor’s $5.3-billion debt after the national government absorbed about $4 billion of Napocor's obligations, Evardone said. “If PSALM generated $10.6 billion from privatization and $2.8 billion [from] new loans or a total of $13.4 billion and prepaid only $1.3 billion of Napocor’s debts, where did the $12.1 billion go," he said. "Had PSALM used all the proceeds of the privatization, the Napocor debts could have been wiped out already hence there would be no more increases in electricity rates through the universal charge to pay the stranded debts and stranded contract costs contained in the petitions with the Energy Regulatory Commission," he said. PSALM had filed four petitions before the ERC to recover P22 billion in stranded contract cost of seven independent power producers or IPPs in Luzon, P470.8 billion in stranded debts, P26.6 billion in stranded contract cost for seven IPPs, and P54.8 billion in stranded debts. If approved, the rates would increase by P1.4525 per kWh. The Philippines charges the third, if not the second, most expensive electricity rates in the world, according to Evardone. “Since PSALM has not yet explained where the proceeds of the privatization went, it would be to the best interest of the Filipino consumers if these petitions are withdrawn first. Obviously, this would be a heavy burden on the part of the people," he said. The lawmaker earlier filed House Resolution 106 ordering the House energy committee to investigate the financial condition and funding of PSALM and NPC, the status and schedule of payments of Napocor’s stranded debts and contract costs. —VS, GMANews.TV

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