PSALM Customers’ Forum

A few months back, my company received a Php 54M bill from the Power Sector Assets & Liabilities Management (PSALM) Corporation as part of the Implementation of Energy Regulatory Commission Decision and Order for the 10th - 17th Generation Rate Adjustment Mechanism (GRAM) and 15th - 16th Incremental Currency Exchange Rate Adjustment (ICERA). The bill represents the mechanism for the recovery of deferred incremental costs covering basic generation cost and prevailing foreign currency exchange rate during the test period October 2008 - April 2010.

Like many other PSALM customers, we were surprised to receive such a bill for electricity consumed nine (9) years ago. It is good for the Distribution Utilities (DU) as they will be able to pass on to their customers the adjustment cost. Bad for the manufacturing sector as the cost cannot be recovered for products they have sold nine (9) years ago.

I have asked the resource speakers when will these adjustment cost stop. The answer was it will take 120 months for the recovery. There is a good news and bad news for the answer. Good news, the customers will only receive bills for 120 months. Bad news, this is only for the existing decision of the ERC. PSALM may again be filing new request for adjustments in the future. There is no certainty on what will be happening. Only one sure thing will happen though, there will be more adjustment costs for customers.

The Philippine electricity industry is such a mess that there is no definitive way to protect consumers. Losses of government corporations like PSALM will always be passed on to consumers. Big consumers like us will get millions for retroactive but unexpected bills.

The purpose of the PSALM customers' forum was for PSALM to

  • Conduct information campaign on the 10th-17th Generation Rate Adjustment Mechanism (GRAM) and 15th-16th Incremental Currency Exchange Rate Adjustment (ICERA) decisions and orders of the Energy Regulatory Commission (ERC);
  • Inform all concerned parties of the deferment of the implementation of the above cost adjustments to January 2018;
  • Address queries of customers on the said ERC Decisions and Orders.

Regardless of the outcome of the forum, the customers are still obliged to pay the bill for the adjustment cost.

About the Author

Ver Pangonilo

A Filipino Engineer, Registered Professional Engineer of Queensland (RPEQ) – Australia and Professional Electrical Engineer (PEE) – Philippines with extensive experience in concept select, front-end engineering, HV & LV detail design, construction and commissioning of Hazardous and Non-Hazardous Area electrical installations in water and waste water pipeline and pumping facilities, offshore platforms, hydrocarbon process plants and pipelines including related facilities. Hazardous area classification and design certification (UEENEEM015B, UEENEEM016B, UEENEEM017B).

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