Administration of Universal Charge
 Through its prudent management and transparent disposal of the collections from the Universal Charge (UC) for missionary electrification, PSALM significantly contributes to lighting up the country’s far-flung areas.
The UC is a non-bypassable charge to be imposed on all electricity end-users for the following purposes as stipulated in the Electric Power Industry Reform Act (EPIRA):
- Missionary electrification;
- Payment for stranded debts and stranded contract costs;
- An environmental charge for watershed rehabilitation and management;
- Equalization of taxes and royalties applied to indigenous or renewable sources of energy vis-à-vis imported energy fuels; and
- A charge to account for all forms of cross-subsidies.
The UC is collected from all end-users every month by the National Transmission Corporation (now the National Grid Corporation of the Philippines) and distribution utilities. The collection is remitted to PSALM every 15th of the following month.
Only the UC for missionary electrification and environmental charge for watershed rehabilitation and management are administered by PSALM.
UC for Missionary Electrification and for environment and watershed rehabilitation and management
On 20 December 2002, the Energy Regulatory Commission (ERC) approved the missionary electrification component of the UC. The ERC also gave its nod to the environmental charge component of the UC on 02 April 2003.
On 13 March 2003, the ERC mandated PSALM to establish a trust fund for the UC, and on 17 February 2004, the PSALM board approved the issuance of internal guidelines for the disbursement of the special trust fund (STF).
Total remittances as of 31 December 2008 amounted to PhP9.829 billion. Of this amount, PSALM disbursed PhP9.06 billion from the STF for the environmental charge of National Power and for the missionary electrification of the National Power-Small Power Utilities Group (National Power-SPUG).
UC for Stranded Debts and Stranded Contract Costs
 The stranded debt is calculated as the total debt service net of privatization proceeds and of the PhP200-billion debt of the National Power Corporation absorbed by the government.
The estimate of stranded contract costs of eligible contracts is calculated every year as the difference between the contractual payment obligations and the revenue earned from the sale of the contracted energy for eligible independent power producers (IPPs).
The ERC, on 06 February 2007, issued a resolution adopting the “Rules for Recovery of NPC Stranded Contract Costs and Stranded Debts Portion of the Universal Charge”. These rules became effective on 09 March 2007 following their publication in a newspaper of general circulation. The rules provide the following:
- Methodology in determining the Universal Charge for Stranded Contract Costs and Stranded Debts (UC-SCC & UC-SD);
- The documentary requirements to support the filing of application; and
- The deadline for filing of the petition, which should not be later than 15 March 2007.
The UC for stranded debts and stranded contract costs is not being collected pending an ERC ruling on the matter. So far, only the universal charges for missionary electrification and environment and watershed rehabilitation are being collected. |
