PSALM seeks ERC nod for supply deals

Published February 13, 2022, 10:00 PM

by Myrna M. Velasco

State-run Power Sector Assets and Liabilities Management Corporation (PSALM) is seeking Energy Regulatory Commission’ (ERC) approval on the contracts for supply of electric energy (CSEE) and letters of agreements (LOAs) that it had entered into with power distribution utilities (DUs) in the Visayas grid.

The PSALM contracts pleaded for a greenlight by the ERC are those with the Guimaras Electric Cooperative Inc. (GUIMELCO) and Northern Samar Electric Cooperative Inc. (NORSAMELCO); while the LOAs were sealed with Don Orestes Romualdez Electric Cooperative Inc. (DORELCO); Eastern Samar Electric Cooperative Inc. (ESAMELCO); and MORE Electric and Power Corporation (MORE Power).

The ERC has scheduled public hearings on March 9 and 16 to cover regulatory evaluation if the applicant-firm complied with all jurisdictional requirements. There will also be pre-trial conference and presentation of evidence during the hearings.

The regulatory body has likewise mandated PSALM “to inform consumers within the affected areas, by any other means available and appropriate,” of the filing of the application and the scheduled public hearings.

The main features of PSALM’s CSEE with GUIMELCO and NORSAMELCO, in particular, are the specifications of contract energy volumes; the assignability of the contract; security deposit as well as the form and time of posting; basic energy charge and the minimum charges.

The other contract provisions touch on service interruption adjustment; maintenance service adjustment; and prompt payment discount which shall be in accordance with PSALM’s credit and collection policies as approved by its Board.

In cases of disputed bills, it was emphasized that “such dispute would be considered as waived, unless customer questions the same in writing within 60 days,” from the receipt of the bill in question.

For overdue accounts, the government-owned firm stipulated that if the power bill “remains unpaid within five (5) days after its due date, PSALM has the option to call on or draw against the security deposit (of the off-taker DU).”

And if there are force majeure events, PSALM further stated that it will have “a maximum of 72 hours, from the time of a force majeure event prevented it from supplying electricity and perform its obligations under the contract, to resume supply.”

With such incidents, it was similarly prescribed that “the customer shall not be entitled to interruption adjustment for such period – unless interruptions exceed 72 hours and the customer failed to fully take or consume its contract energy.”

When it comes to contract cessation, it was further noted that “either party will have the right to terminate (the) contract upon failure of the other to perform its obligation…provided that the party at fault will have to pay all its outstanding account and reimburse the costs incurred by the other party as a result of the termination.”