Tag Archives: National Power

[In the news] NGO seeks Congress intervention in PSALM rate hike plea -InterAksyon.com

NGO seeks Congress intervention in PSALM rate hike plea
February 9, 2012

MANILA, Philippines – The liabilities of the agency tasked to bring down the debt of state-owned National Power Corp. (Napocor) has ballooned from P807.8 billion when it was created in 2001 to nearly P1 trillion last year, according to non-government Freedom from Debt Coalition (FDC).

In a statement, FDC said the surge in its debt shows that Power Sector Assets and Liabilities Management Corp. (PSALM), which was created under the Electric Power Industry Reform Act of 2001 (EPIRA), failed to address the fiscal difficulties of Napocor.

At end-2011, the government owed P915.19 billion, with PSALM accounting for P767.08-billion or 83.8 percent, broken down into P 744.63 billion worth of outstanding liabilities and P22.45 billion in contingent liabilities. This was despite Napocor’s sale of 25 out of 31 power plants, as well as the privatization of the power grid operations under National Transmission Corp. (TransCo).

Read full article @ www.interaksyon.com

[In the news] ‘Napocor-Meralco deal will result in power rate hike’ – www.philstar.com

‘Napocor-Meralco deal will result in power rate hike’
By Edu Punay (The Philippine Star)

MANILA, Philippines – The Court of Appeals (CA) ruling upholding the legality of the P14-billion agreement between the National Power Corp. (Napocor) and the Manila Electric Co. (Meralco) will be harmful to consumers who carry the burden of any increase in power rates.

It was on this premise that Associate Justice Japar Dimaampao cast a dissenting vote in the decision of the special division of the appellate court that gave the go-signal for the implementation of the deal, which is expected to cost Meralco costumers an additional 12 centavos per kilowatt-hour over five to six years.

In his nine-page dissenting opinion, Dimaampao favored the bid of the government through the Office of the Solicitor General (OSG) to stop the Pasig City regional trial court from implementing its order affirming the validity of the settlement claim that was forged in 2003 and in further proceeding in connection with Meralco’s civil suit.

Dimaampao penned last February a resolution, which issued a writ of preliminary injunction, indefinitely enjoining the implementation of the settlement.

Dimaampao said in his dissent that “with all due respect, the thesis taken by the majority is fallacious. In a word, I cannot turn a blind eye to the manifest glitch in the majority ruling.

Read full article @ www.philstar.com

[Event] I Blackout against power hike!


Noticed your electric bills?
It has started.
Power rate has gone up due to wrong policies under privatization and EPIRA.

Register your protest! BLACK OUT your profile pics and say…

FB campaign mechanics:

All Filipinos and friends around the World-Wide Web with Facebook account and wishing to register one simple act of protest against continuing hike of power rates in the Philippines are enjoined to temporarily change their profile picture with the BLACKOUT logo (below) on  October 11, 2011 from 3:00 in the afternoon to 9:00 in the evening.  Let us register our voices that even as Facebookers we too are concerned NETizens and affected by the increasing power rate.  Invite all your facebook friends to do an act of SOLIDARITY.


Join the National day of action, Oct.11, 7:30-8pm National Power-OFF/Lights-OFF!

[In the news] Power rate increases to hit women the hardest, group says – www.sunstar.com.ph

Power rate increases to hit women the hardest, group says
By Jonathan de Santos

POWER RATE hike applications pending at the Energy Regulatory Commission (ERC) will hit women the hardest if they are approved, a debt watchdog group warned Tuesday.

The Freedom from Debt Coalition (FDC) Women’s Committee picketed the ERC office in Pasig City Tuesday to urge the regulatory body to turn down petitions from the Power Sector Assets and Liabilities Management Corp. (Paslm) and the National Power Corp. (Napocor) to raise rates by around P0.40 per killowat-hour (kwh) to cover debt payments and contract costs.

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Judy Ann Chan-Miranda of the FDC Women’s Committee said the ERC should shoot down the “anti-women” and “anti-poor” proposed rate increases.

“High power rates mean women taking on even more work to pay for electricity and have something left for other essentials. It means cutting the budget for food, medicines and healthcare, the education of children. It means having little choice but borrow from loan sharks to avoid disconnection,” she said in a press statement.

Read full article @ www.sunstar.com.ph

[Press Release] Junk Napocor, Psalm petition to increase universal charge, FDC urged ERC

MANILA, Philippines – The petition of National Power Corporation (Napocor) and Power Sector Assets Liabilities Management (PSALM) seeking to recover stranded debts and contract costs amounting to almost P140 billion or equivalent to 40 centavos per kilowatt-hour through the universal charge (UC) should be denied by the Energy Regulatory Commission for lack of merit and substance, according to the Freedom from Debt Coalition.

In a protest action outside the Ortigas office of the regulatory body coinciding the public hearing on the said petition, FDC members from various communities and Youth Against Debt brought giant “scissors” demanding cuts in electricity rates in the country, which, at present, has the highest residential power rates in Asia at 24.566 US cents per kWh.

The group also brought a giant paycheck illustrating the latest total debts of Napocor and PSALM, amounting to P729 billion ($17 billion, P42:$1) under the account name of Juan de la Cruz. They then cut up the check with scissors, symbolically rejecting the huge debts intended to be passed on to ordinary consumers in the next 25 years.

FDC claimed that PSALM is “hiding behind small numbers” because the agency’s “true and cruel intention” is to pass on the entire debt to ordinary consumers. The group added that raising awareness about this issue among the public is vital.

PSALM is mandated under Republic Act No. 9136 or the Electric Power Industry Reform Act (EPIRA) to calculate the amount of stranded debt and stranded contract costs of Napocor. EPIRA defines stranded debts as any unpaid financial obligation of Napocor that has not been liquidated by the proceeds from the privatization of its assets. On the other hand, stranded contract costs are those excess contracted cost of electricity under eligible contracts over the actual selling price of the contracted energy output of these contracts in the market.

In their petition, Napocor and PSALM seek the approval of stranded contract costs portion of UC in the amount of P74.298 billion to be imposed at the rate of P0.3666/kWh, and stranded debts portion of UC in the amount of P65.019 billion at the rate of P0.0313/kWh. The petitioners seek to impose these additional rates to customers of the Luzon, Visayas and Mindanao grids. They await the issuance of provisional authority in order to start charging electricity consumers with these additional rates pending approval of their petition.

Job Bordamonte, FDC power campaign coordinator, said that privatization of assets held by government-owned entities – in this case Napocor – “strands” certain costs. This is because obligations incurred in pre-existing expenses/debts pertaining to acquisition and maintenance of those assets would have been recovered by Napocor through its return-on-rate-base (RORB).

“But these could no longer be recovered when the assets were sold to private entities and could no longer be operated by Napocor for electricity-generation,” said Bordamonte.

In its intervention, FDC cited a paper by William J. Baumol and J. Gregory Sidak published in the Harvard Journal of Law and Public Policy (Volume 18, Number 3, Summer 1995), explaining that these costs represent expenditures incurred in the past while meeting its obligation to serve all customers within the area in which it holds an exclusive franchise.

“However, the entry of competitors who are not burdened by such inherited expenses can prevent the utilities from recovering those costs,” FDC said.

The ERC has denied PSALM and Napocor’s first petition on 15 November 2010 due to their failure to substantiate their application for proposed rate increase. The original amount of the said application was P573 billion for stranded debts while stranded contract costs was around P22 billion and P26.865 billion. FDC was one of the many opposed to the said application.

However, FDC has learned during the budget deliberation last August 9 at the Lower House that PSALM’s most updated debts continue to surge, amounting now to $17 billion or P729 billion (P42:$1). FDC believes that a series of applications is still being worked out by PSALM and Napocor until the entire amount is paid for by consumers.

In addition, FDC said that the petition on stranded debts tends to lump all types of Napocor losses together to be paid for by electricity consumers through the UC. “This opens the door to double recovery for Napocor, such as actual and/or constructive recovery through its regulated rates and recovery through the UC,” FDC said.

According to FDC, “most of the amount in the latest applications does not have any relations to our legitimate usage of electricity because these are mainly financial obligations in the form of debts which are being borne-out over the past years of government incompetence, mismanagement and wrong policies that continue to aggravate the lingering problems of our national debt as well as our power industry.”

FDC said that despite the EPIRA’s formula of selling government assets, imposing various additional charges, and assuming P200 billion of Napocor debt, the debts of Napocor and PSALM continue to balloon while the lives of ordinary consumers worsen in the last ten years under the EPIRA law.

FDC said the present administration must acknowledge that this is no longer a business-as-usual approach in relation to the issue of ever-increasing power rates which are being left alone in the hands of ERC commissioners.

Invoking President Benigno S. Aquino III’s slogan of “matuwid na daan,” FDC said that this is a matter of national survival and that the need for a debt audit and cancellation of onerous Napocor loans are urgent. (30)

22 August 2011