Half of power sector debts may be recovered via consumers

Half the financial obligations of state-run energy firms, amounting to almost P500 billion, may be recovered from power consumers, Energy Secretary Jose Rene Almendras said Monday. This can be done through the universal charge component of electricity bills, Almendras explained. The P932.21 billion obligations of the Power Sector Assets and Liabilities Management Corp. (PSALM), National Transmission Corp. (Transco), and National Power Corp. (Napocor) may be reduced by half by drawing the amount from consumers, the energy secretary said. Almendras told the House committee on energy that PSALM — the government’s privatization arm in the power sector — has an outstanding obligation of P785.09 billion. Transco’s obligations reached P99.15 billion and that of Napocor’s totaled P47.97 billion, he added. The Energy Department wants to pay the obligations of the energy sector over 25 years to lessen its impact on the national budget and on consumers. “Can you imagine the amount of strain on the national budget if we have to pay $2 billion in five years? That’s going to eat up your debt caps," he said. “If you stagger it, if you stretch it out, then it makes more sense," he added. Almendras said the departments of Energy and Finance are now looking at other ways to deal with obligations of the energy sector. Another solution is for the government to borrow from multilateral institutions for the funds to settle the obligations, he pointed out. However, the government has not yet initiated talks with multilateral lending agencies because discussions are still at the department level. —JE/LRS/VS, GMANews.TV