Republic of the Philippines

HOUSE OF REPRESENTATIVES
Quezon City

FIFTEENTH CONGRESS
First Regular Session

HOUSE RESOLUTION No. 97

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Introduced by Bayan Muna Rep. TEODORO A. CASIÑO

RESOLUTION
URGING THE COMMITTEE ON ENERGY TO CONDUCT AN INQUIRY, IN AID OF
LEGISLATION, INTO THE ANTI-CONSUMER MOVE OF THE POWER SECTOR
ASSETS AND LIABILITIES MANAGEMENT CORPORATION (PSALM)TO PASS ON
P470.865 BILLION OF ITS DEBTS AND EXPENSES TO ELECTRICITY CONSUMERS

WHEREAS, the Power Sector Assets and Liabilities Management Corporation (PSALM), a
government owned and -controlled corporation tasked to undertake the privatization of the assets of
the National Power Corporation (Napocor) intends to hike electricity rates with the burden to be
shouldered by power consumers in the next 17 years;

WHEREAS, the PSALM filed before the Energy Regulatory Commission (ERC) its bid to pass on to
electricity consumers the P80.9 million bonus it gave to its employees. This was packaged as a
“performance incentive” for privatizing power assets and were itemized as “other maintenance and
operating expenses” (in 2008 alone), on top of the P80.5 million salaries for its 165 personnel;

WHEREAS, PSALM also sought to recover P18.4 million covering the night shift differential for its
trading team then at the Wholesale Electricity Spot Market (WESM) and a whopping P118 million for
professional services that were paid to its consultants on privatization. These were all inserted in the
company’s filing for stranded debts recovery totaling P470.865 billion;

WHEREAS, Section 32 of the Electric Power Industry Reform Act (EPIRA) clearly defines stranded
debts as referring to “unpaid financial obligations of Napocor.” The law does not mandate stranded
debts to include employee compensation, bonuses and the so-called professional consultancy service
fees;

WHEREAS, in PSALM’s filing for universal charge recovery accounting for stranded debts, it
proposed to pass on via electric bills on a levelized P0.3049 per kilowatt hour (kWh) as additional
charges in the bills; provided that its recovery period will last only until PSALM’s end of corporate life
in 2025;
WHEREAS, apart from the initial filing of P471 billion in June 2009, PSALM filed for another
P54.897 billion stranded debt recovery starting last month wherein it sought to pass on P0.8677 per
kWh additional charges in the electric bills;

WHEREAS, these are on top of the company’s bid for another pass-on of stranded contract costs.
The latest filing in June 2010 amounting to P26.685 billion will redound to P0.1879 per kWh additional
universal charge in the bills; while the initial stranded contract cost filing in 2009 will translate to
P0.5024 per kWh rate recovery;

WHEREAS, the looming power rate increase following the move of the PSALM to pass on to
electricity consumers its expenditures worth about P470.8 billion is at the least unconscionable and
downright illegal as it benefits a few PSALM officials, employees and their so-called consultants at the
expense of power consumers from all sections of society;

WHEREAS, in light of PSALM's move to pass on its various expenses to the consumers, there is an
urgent need for Congress to review the EPIRA, especially its provisions that have resulted in higher
electricity prices, in order to ensure that the opposite happens;

NOW THEREFORE BE IT RESOLVED, AS IT IS HEREBY RESOLVED, that the

Committee on Energy conduct an inquiry, in aid of legislation, into the anti-consumer move of the
Power Sector Assets and Liabilities Management Corporation (PSALM)to pass on P470.865 billion of
its debts and expenses to electricity consumers.

Adopted,

REP. TEODORO A. CASIÑO

Bayan Muna Party-list