Question & AnswerQ&A (ERC Resolution NO. 02, S. 2011)
The Universal Charge (UC) is a charge to be determined, fixed, and approved by the Energy Regulatory Commission (ERC) imposed on all end-users for purposes including the recovery of Stranded Contract Costs and Stranded Debts of the National Power Corporation (NPC).
Stranded Contract Costs refer to the excess of the contracted cost of electricity under NPC's eligible contracts with Independent Power Producers (IPPs) over the actual selling price of the contracted energy output of such contracts in the market, where the contracts were approved by the Energy Regulatory Board as of December 31, 2000.
Stranded Debts of NPC refer to any unpaid financial obligations of NPC which have not been liquidated by the proceeds from the sales and privatization of its assets.
The ERC verifies the reasonable amounts of claims petitioned by PSALM Corporation and determines the manner and duration by which full recovery of Stranded Debt and Stranded Contract Costs of NPC is attained, with the recovery period lasting between fifteen to twenty-five years.
No. The Universal Charge is a non-bypassable charge and must be collected from all end-users including self-generating entities as per the Rules Governing the Collection of the Universal Charge.
Yes. Self-Generating Facilities registered with the ERC and PSALM are exempted from the imposition of the Universal Charge for a period of four years from its imposition.
The Special Trust Fund is established to disburse funds only for the purposes specified under the law in an open and transparent manner, specifically for handling Universal Charge remittances and disbursements.
The recovery period for Stranded Contract Costs and Stranded Debts must not be shorter than fifteen (15) years nor longer than twenty-five (25) years, as mandated by the EPIRA and its Implementing Rules and Regulations.
PSALM Corporation files claims for Stranded Contract Costs and Stranded Debts with the ERC, which verifies the reasonable amounts and oversees the recovery process.
The Amended Rules took effect on the fifteenth (15th) day following their publication in a newspaper of general circulation after approval on February 7, 2011.