THE Energy Regulatory Commission (ERC) has approved in part the application of the Philippine Electricity Market Corp. (PEMC) to repay a loan amounting to about P817 million to build its electronic market management system through unused funds and additional transaction fees.
In an order, ERC Chairperson and Chief Executive Officer Agnes VST Devanadera along with three commissioners granted the motion for partial reconsideration filed by PEMC but trimmed the fees that the company can collect from market participants.
The commission said PEMC is authorized to use its other income and unutilized budget amounting to P510,138,981 to partially pay down a loan from state agency Power Sector Assets and Liabilities Management Corp. (PSALM) of P816,858,077.95.
“PEMC shall be allowed to collect the remaining balance for a period of one (1) year but based on the recalculated amount of [P]323,994,436.65,” it said.
In its motion, PEMC was asking to collect a balance of P343,525,388.58 using a fixed interest rate of 12% to be recovered for one year, but the ERC recalculated the balance based on the Bangko Sentral ng Pilipinas’ (BSP) average lending rate of 5.6323% from 2012 to 2017.
The balance will be collected from market participants in Luzon and the Visayas where the wholesale electricity spot market (WESM) fully operates.
PEMC’s motion is a follow-up of a previous application that the ERC approved on Aug. 31, 2017. In its motion for partial reconsideration filed on March 21, 2018, the company sought the use of its other income and unused funds to partly pay for the total loan.
ERC said it found merit in PEMC’s explanation in cutting the repayment period to one year instead of the previously approved three years as it will reduce the financial impact of the additional market fees for the market participants as interest will be collected for a shorter period.
“PSALM needed the immediate repayment to meet its other obligations. PEMC had met with the PSALM officers and they emphasized to PEMC that there is a need for immediate repayment as PSALM is also in need of funds to meet its obligations,” the company said in its explanation.
The ERC agreed, saying the loan was due and must be settled, thus a shorter period of one year “is reasonable as it would indeed lessen the amount of interest to be paid redounding to the interest of electricity end-users.”
Aside from Ms. Devanadera, the order was also signed by ERC Commissioners Josefina Patricia A. Magpale-Asirit, Alexis M. Lumbatan and Catherine P. Maceda. — Victor V. Saulon