Senator Win Gatchalian is pushing for the passage of legislation authorizing the use of the ₱207-billion Malampaya Fund to pay off the stranded contract costs and stranded debt of the National Power Corporation (Napocor), which he said would provide consumer savings for Filipino households on the monthly electricity bill.
Gatchalian, who chairs the Senate Committee on Energy, sponsored this week Senate Bill No. 1950 or the Murang Kuryente Act, which is based on a bill authored by Senate President Pro Tempore Ralph Recto.
The lawmaker noted that the ₱207-billion fund, which was initially intended to fund the exploration, development, and exploitation of energy resources, has remained largely unused since 2001.
“The measure I am sponsoring today proposes to minimize, if not completely eliminate, the universal charges for stranded contract costs and stranded debts. If passed into law, this bill would lower electricity rates and provide significant consumer savings for Filipinos,” the Senator said in his sponsorship speech.
He lamented that consumers have long been made to share the burden of paying National Power Corporation’s (Napocor) debts through the universal charge for stranded debts and stranded contract costs paid in the monthly electricity bill.
The lawmaker estimated that power consumers shelled out ₱0.1938 per kilowatt hour from January 2013 to May 2017 to pay for Napocor debts through the universal charge for stranded debts and stranded contract costs. In June 2017, Filipino household started paying ₱0.2203 per kilowatt.
Gatchalian warned that Filipino households may have to suffer even more pass on charges as the cash flow projection of the Power Sector Assets and Liabilities Management Corporation (PSALM), the government corporation which inherited Napocor’s debts, shows the necessity of collecting an accumulated universal charge of ₱0.5593 pesos per kilowatt hour from the year 2020 to 2026 unless the bill becomes law.
He pointed out that this may translate to additional charge of ₱111.86 pesos per month for a household consuming 200 kilowatts during said period – money that could have been used to buy 2 to 3 additional kilos of rice.
By using the Malampaya Fund – accrued from the net profit share earned by the government from the operation of the Malampaya Natural Gas Project in the West Philippine Sea – solely for the payment of the stranded contract costs and stranded debts, Gatchalian asserted that the bill would help lower electricity rates and provide significant consumer savings for Filipinos. For a household consuming 200 kilowatt hours per month, Gatchalian said this would result in savings of ₱109.34 per month, and ₱1,312.08 per year.
He allayed fears of fund disbursement abuses should the bill be approved, saying that he has placed several safeguards for its use.
Gatchalian explained that PSALM may only tap the fund after it has already applied the collections from its different sources of revenue. The funds to be used for the power debt payment servicing will be allocated through the General Appropriations Act, according to the lawmaker.
Once the obligations have been fully paid, Gatchalian said the remaining funds will be remitted to the Special Fund used to finance energy resource exploration, development, and exploitation programs.
“It is high time for the Filipino people to receive tangible benefits from the Malampaya Fund. With the approval of this measure, the government profits realized from the Malampaya Natural Gas Project will end up producing more affordable retail power rates for millions of consumers across the country,” he said.