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Senate panel studies use of Malampaya funds to reduce universal charge, create consumer savings

NUEVA ECIJA, Philippines – A young man rides along with his biker buddy in Cabanatuan City as power lines loom overhead, 16 May 2018. The Senate Committee on Energy is eyeing to lighten the burden of consumers due to universal charges on their power bills by tapping Malampaya fund. Photo by Mark Cayabyab/OS WIN GATCHALIAN

The Senate Committee on Energy is studying the possibility of using the ₱204 billion Malampaya Fund to reduce the universal charge (UC) paid by end-consumers on their monthly electricity bills, which could result in household savings as high as ₱2,033.76 annually.

The committee took up Senate Bill No. 924, authored by Senate President Pro-Tempore Ralph Recto, which proposes to allocate the net national government share from the Malampaya Natural Gas Project for the payment of the stranded contract costs (SCC) and stranded debts (SD) of the National Power Corporation. SCC and SD are components used to compute the UC imposed on consumers under the EPIRA Law (RA 9136).

According to data presented by the Power Sector Assets and Liabilities Management Corporation (PSALM), applying the remaining ₱204 billion of the Malampaya Fund would avoid an increase of ₱0.8474 per kilowatt hour (kWh) in retail power rates. This would result in annual savings of ₱2,033.76 for an average household consuming 200 kWh per month.

“These savings are enough for an underprivileged household to buy two additional sacks of rice every year,” noted Senator Win Gatchalian, the chairman of the Senate energy panel.

The senator expressed support for the measure in principle, subject to further study on precisely how much of the remaining Malampaya funds should be applied for the purpose.

Meanwhile, Gatchalian took to task once more the embattled Energy Regulatory Commission (ERC) for several delays in the approval of SCC and SD rate applications. According to PSALM, the various delays have resulted in an additional ₱34.78 billion of costs to be shouldered by consumers, equivalent to a power rate increase of ₱0.1973 per kWh.

The senator told ERC representatives at the hearing: “After all of your controversies, dadagdagan niyo pa si Juan Dela Cruz ng 34 billion pesos in costs dahil sa delay. This is absolutely unacceptable. Anong solusyon ang gagawin ninyo?”

Atty. Krisha Buela of ERC responded that the regulatory agency was currently conducting a review of its procedures and process flows to improve their work.

Gatchalian replied: “I’m telling you that there’s a problem in your procedures. It’s a 34-billion peso problem to be shouldered by the Filipino people.”

After the hearing, the senator reiterated the need to pass the ERC Governance Act (Senate Bill No. 1490) to foster transparency and accountability in the deliberations and decisions of the country’s independent power sector regulator.

Gatchalian is expected to sponsor the substitute version of the bill reported out by the energy committee within the next few months.