Senate approves on 2nd reading the ‘Murang Kuryente’ bill

January 30, 2019

A power cost-saving measure which could prove to be a relief not only to poor families but to consumers across the country, has hurdled second reading in the Senate.

Contained under Committee Report No. 426, Senate Bill No. 1950 proposes to reduce electricity rates by allocating the net national government share from the Malampaya natural gas project for the payment of the stranded contract costs and stranded debts of the National Power Corporation (Napocor).

"This bill, I have been assured, complies with Presidential Decree (PD) 910 and the Supreme Court ruling on the matter. The earnings from Malampaya will be plowed back to an activity which is related to energy," Senate President Pro-Tempore Ralph Recto, who originally authored the bill, said.

PD 910 mandates that government share from service contracts and agreements such as the Malampaya Fund, shall be used to finance energy resource development and exploration programs and projects.

"We should use Malampaya (funds) to ease the burden of households," Recto added.

Endorsed by Sen. Win Gatchalian, energy committee chair and Recto's co-author of the bill, the utilization of the Malampaya Fund for the payment of Napocor's debts which was transferred and assumed by the Power Sector Assets and Liabilities Management Corp. (PSALM), is based on the policy of the State to "protect public interest by ensuring the provision of reliable, secure and affordable supply of electric power to consumers."

The universal charge is estimated to increase in the coming years to pay the remaining debt of P466.2 billion and the cash flow projection of PSALM shows the necessity of collecting an accumulated universal charge of P0.8600 per kilowatt hour from 2020 to 2026, Gatchalian said.

"This means a total additional charge of P172 per month for an average household - money that could have been used to buy two to three additional kilos of rice," he added.

In tapping the existing and future collections of the Malampaya Fund for the payment of the stranded contract costs and stranded debts, Gatchalian said this would result in savings of P169.48 per month and P2,033.76 per year.

The total collections of the Malampaya Fund as of Dec. 2017 stood at P204 billion.

Under the bill, the "net national government share from the Malampaya Fund shall be remitted to a special trust fund to be administered by PSALM; provided that the amounts herein allocated shall be included in the General Appropriations Act (GAA)."

The Department of Budget and Management (DBM) shall provide a timely release of the amounts allocated and appropriated to the PSALM in accordance with its debt and independent power producer payment schedule.

"When the stranded contract costs, stranded debts and anticipated shortfalls in the court of the payment of such liabilities are fully paid before the termination of the corporate life of the PSALM, the net national government share shall be utilized for the payment of the missionary electrification charge, environmental charge and feed-in tariff allowance; provided that any and all excess in the fund shall accrue back to the special fund used to finance energy resource development and exploitation programs created under PD 910," the bill said.

PSALM's corporate life will end in 2026. DMS