PSALM to stop collecting universal charge for SCC

By Lenie Lectura – February 3, 2020
from Business Mirror

THE Power Sector Assets and Liabilities Management (PSALM) Corp. will no longer collect from consumers P0.0543 per kilowatt-hour (kWh) Universal Charge for Stranded Contract Costs (UC-SCC) starting this month.

“This is a relief to power consumers all over the country as they are no longer going to be charged the UC-SCC,” the state firm said in a recent announcement.

PSALM has started advising electricity distribution and collecting utilities to terminate the implementation of the UC-SCC.

In the decision of the Energy Regulatory Commission (ERC) dated April 10, 2019, in Case 2015-139-RC, PSALM was permitted to recover P5,117,060,647.80 through the aforementioned UC-SCC.

Garcia, in a text message, explained that PSALM’s authority to collect the 5.43 centavos per kWh is hinged on fully recovering the amount of P5,117,060,647.80.

“Based on our calculations, once we are able to collect the US-SCC included in the January billings, then we will be able to recover already the said P5,117,060,647.80, and so we need to cease collection already,” said PSALM President Irene Besido-Garcia in a text message when sought for further comment.

She said this is consistent with the ERC decision that had approved its particular UC-SC. “Thus, last Friday, we instructed the collecting entities to stop including the UC-SCC of 5.43 cents per kWh starting the February billings,” she added.

The Electric Power Industry Reform Act defines UC-SCC as the excess of the contracted cost of electricity under eligible contracts over the actual selling price of the contracted energy.

The UC-SCC charges were intended to pay the remaining financial obligations that the government incurred due to the construction of new power plants to alleviate the power shortages in the 1990s and early 2000.