Filipino power consumers are now one step closer to having cheaper electricity after the Bicameral Conference Committee approved a bill authorizing the use of ₱208 billion from the Malampaya fund to pay off the stranded contract costs and stranded debt of the National Power Corporation (Napocor).
With the approval of the reconciled version of Senate Bill No. 1950 and House Bill No. 8869, Senator Win Gatchalian said the burden of paying Napocor’s debts through the universal charge for stranded debts and stranded contract costs incorporated in the monthly electricity bill will finally be lifted from the shoulders of every Filipino.
The Senate Committee on Energy, chaired by Gatchalian, and the House Committee on Energy, chaired by Rep. Lord Allan Velasco, agreed on Thursday to adopt SB No. 1950 as the base of the reconciled bill.
“For the longest time, Filipinos have been burdened by Napocor’s debts through the universal charges for stranded debts and stranded contract costs incorporated in the monthly electricity bill. With the Bicam’s approval of the Murang Kuryente Act, we are getting closer towards unshackling every Filipino from that burden,” Gatchalian said.
“I hope President Duterte will sign this landmark bill immediately for the Filipino people to finally receive the tangible benefits from the Malampaya Fund as soon as possible,” he added.
The Murang Kuryente Act, which is based on a bill authored by Senate President Pro Tempore Ralph Recto, seeks to use 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 – for the payment of stranded contract costs and stranded debts.
Gatchalian asserted that the bill would help lower electricity rates and provide significant consumer savings for Filipinos by ₱0.86 per kilowatt hour. For a household consuming 200 kilowatt hours per month, Gatchalian said this would result in a savings of ₱172 per month or ₱2,064 per year.
He pointed out that households may use the saved amount to buy additional an additional three to four kilos of rice per month or roughly a sack of rice per year.
Data from the Department of Energy (DOE) shows that Malampaya fund as of 2018 amounts to around ₱270 billion and is expected to grow to ₱367 billion by the end of 2022.
To this day the Malampaya fund has remained largely unused since 2001. It was initially intended to fund the exploration, development, and exploitation of energy resources.
Moreover, the lawmaker noted that even if the government used ₱208 billion from the Malampaya fund, that there will still be around ₱159 billion left, which can be used for energy exploration.
He also allayed fears of fund disbursement abuses should the bill be signed into law, saying that several safeguards have been put in place to prevent malfeasance and misfeasance.
Gatchalian explained that the Power Sector Assets and Liabilities Management Corporation (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 used to pay missionary electrification and environmental charges as well as the feed-in-tariff allowance.
“With the approval of this measure, the government profits realized from Malampaya Natural Gas Project will end up producing more affordable retail power rates for millions of Filipino consumers across the country,” he said.
