PSALM to cut Luzon, Mindanao generation charges

MANILA, Philippines — The Power Sector Assets and Liabilities Management Corp. (PSALM) is proposing to reduce its basic generation charge in Luzon and Mindanao.

However, it is looking to raise its rate in Visayas following the impact of fuel and purchased power cost as well as foreign exchange-related cost in the past year.

PSALM has filed with the Energy Regulatory Commission (ERC) its eighth application for  adjustments of fuel and purchased power costs and foreign exchange-related costs for 2017.

The state-run firm also asked the power regulator to approve its proposal to refund P8.6 million to Luzon customers and P5.03 billion to Mindanao customers.

This is equivalent to a reduction of P1.1382 per kilowatt-hour (kwh) and P1.1353 per kwh in the basic generation charge (BGC) to Luzon and Mindanao customers, respectively.

However, PSALM is seeking to recover P5.5 million from customers in Visayas, equivalent to an increase of P0.9081 per kwh in the BGC component in electricity bills.

The BGC is an ERC-approved generation rate imposed by National Power Corp./PSALM for the sale of electric energy to its customers with transition supply contract (TSC) or contract for the supply of electric energy (CSEE).

The said amounts are proposed to be refunded and recovered for a period of one year, once approved by the ERC.

During the period covered, PSALM said there were no fuel purchase costs across its assets in the three power grids since the Malaya Thermal Power Plant (MTPP) in Luzon—its only remaining fuel-based plant—is designated as a must-run unit in the wholesale electricity spot market (WESM).

Meanwhile, the state-run firm purchased power from independent power producers (IPP) to be able to serve its customers.

In Luzon and Mindanao, PSALM billed its TSC and CSEE customers more than the actual allowable fuel and purchased power costs during the period.

But in Visayas, the amount charged to its customers had a shortfall to cover the actual allowable fuel and purchased power costs.

As for the foreign exchange-related costs, PSALM incurred P976,829.41 in Luzon, P148,045.72 in Visayas, and P45.36 million in Mindanao.