The Power Sector Assets and Liabilities Management (PSALM) Corporation finally broke its silence as it belied allegations that it tucked in bonuses, night differentials, and consultancy fees into its stranded debts recovery of P471 billion to be passed on via universal charge to all electricity consumers.

In a press statement, the company indicated that the reports were erroneous and that the public must just wait for the evaluation of the Energy Regulatory Commission.

But in the hearing at the Energy Regulatory Commission (ERC), it was PSALM vice president Lourdes S. Alzona herself, under oath at the hearing, who admitted that their computation on stranded debts included expenses, operating costs and all other unpaid financial obligations that have not been paid from privatization proceeds and operating income from National Power Corporation (NPC) that were included in the stranded debts computation.

When a question was raised by a consumer group from homeowners association the reasonableness of the P80.9 million bonuses of PSALM that will eventually be passed on to consumers, Alzona just responded that “because we have to consider, your Honor, this is not only for plantilla positions, this includes all contractuals that we have.”

The PSALM official further indicated that the definition of stranded debt was somehow broadened to include all “unpaid financial obligations of NPC”, which she explained to be computed based on cash flow from NPC operations and privatization proceeds, then anything that will not be paid by those will be treated as stranded debts; and that included also operating expenses including wages and salaries at plants and head office.

The bonuses, salaries and consultancy fees were also discussed at length in the hearing without any single statement from PSALM to qualify that these are not part of the stranded debts.

PSALM does not have its own source of income aside from those of NPC’s operations and privatization proceeds, so its salaries, bonuses and expenses are components of the financial obligations that would be paid for by these cash flow sources.

“The news reports erroneously stated that PSALM's corporate expenditures that included bonuses, night differentials, and consultancy fees were part of the PhP470.8- billion stranded debts of National Power Corporation which would be recovered through the UC,” PSALM said.

It added that these “were never part of the UC applications it filed with the Energy Regulatory Commission (ERC), and its officers never claimed in hearings before the ERC that the expenditures are being claimed under the UC.”