PSALM open to renegotiate IPP obligations

The Power Sector Assets and Liabilities Management (PSALM) Corp. is open to renegotiate the independent power producers’ contractual obligations and allow government to save more, the company said Wednesday. In a statement, PSALM also said it will study the implications of the proposed withdrawal of petitions filed to recover the universal charge for stranded debts and stranded contract costs of the National Power Corp. (Napocor), as suggested by a number of solons. "PSALM will assess the implications of the proposal and will continuously seek other possible sources to narrow the huge gap between the privatization proceeds and the outstanding maturing obligations of the Napocor should the PSALM Board adhere to the recommendation to withdraw the universal charge applications," PSALM president and CEO Emmanuel Ledesma Jr. said. Ledesma added that the agency is awaiting the formal House of Representatives resolution on universal charge applications with the Energy Regulatory Commission (ERC) before taking action. He also belied reports that PSALM, ERC, and the Department of Energy have been remiss in their respective obligations to lower power rates. PSALM has been accused of “milking the cow" by draining the public of cash in an effort to pass on to consumers Napocor’s stranded obligations, the agency noted. “It is important to point out that the recovery of the universal charge is mandated under the Electric Power Industry Reform Act (EPIRA), and PSALM has stringently followed the amended guidelines issued by the ERC in determining the amount of the universal charge-stranded debt and universal charge-stranded contract cost," Ledesma said. The EPIRA had allowed the recovery of the universal charge since it is critical to the government’s liability management program for the power sector, he added. — PE/VS, GMA News