Stranded costs in power bills mostly Napocor perks — Recto

Almost half of the P470.9 billion stranded costs of the cash-strapped National Power Corp. (Napocor) are allegedly fat bonuses, overtime pay and hefty consultancy fees of the Power Sector Assets and Liabilities Management Corp. (Psalm), which are all passed on to consumers by way of higher electricity bills.

Sen. Ralph Recto bared this yesterday saying that these fees are being inserted by Psalm to form part of the Napocor’s unpaid debts and intended, supposedly, to be paid or recovered through power rate adjustments.

Psalm, a spin-off firm of the Napocor, tasked to auction off the state-power corporation’s assets to pay off its debts, has recently petitioned the Energy Regulatory Commission (ERC) to allow it to pass on to consumers some P80.9 million “performance incentive” bonus that it bestowed to its employees, Recto said.

This was on top of the P80.5 million salaries for its 165 personnel; P18.4 million night differential pay for the trading personnel manning the Wholesale Electricity Spot Market (Wesm) and another P118 million for the professional fees of consultants hired by Psalm, the senator added.

Recto said the bonuses, salaries, overtime pay and professional fee of consultants will reach as much as P217.3 million.

Recto stressed that the law that created Psalm never mentioned that bonuses, overtime pay and even professional fees of consultants should also be charge against the multibillion-peso stranded contract costs of the state power firm.

“A cursory reading of the Epira (Electric Power Industry Reform Act) law yields no mention of any provision prescribing that stranded debts will include employee compensations or bonuses,” he stressed.

As of May 2010, the government has already privatized 25 operating/generating power facilities or 91.8 percent of the total 3,778.23 megawatt total rated capacity of Napocor’s generating assets in the Luzon and Visayas grids, which translated to proceeds of $10.6 billion or roughly P470 billion.

The senator said Psalm appears to have only paid down part of the Napocor debts while piling up new mountain of debts through fresh loans to refinance existing loans and bankroll ballooning operating expenses. –Angie M. Rosales, Daily Tribune