Sen. Sherwin T. Gatchalian on Wednesday pressed for early enactment of an enabling law to use the P207-billion Malampaya Fund to pay off the stranded contract costs and stranded debt of the National Power Corp. (Napocor) in order to provide Filipino households consumer savings on their monthly electricity bill.
Gatchalian, Senate Committee on Energy chairman, endorsed for plenary approval Senate Bill 1950, also known as the Murang Kuryente Act, adopting a bill filed by Senate President Pro Tempore Ralph G. Recto.
In his sponsorship speech, Gatchalian informed the Senate that the P207-billion fund, originally intended to bankroll exploration, development and exploitation of energy resources, was largely unused since 2001.
The senator affirmed that early passage of the proposed enabling law will “minimize, if not completely eliminate, the universal charges for stranded contract costs and stranded debts.”
Once enacted into law, he added, “this bill would lower electricity rates and provide significant consumer savings for Filipinos.”
Gatchalian griped that consumers have long been made to share the burden of paying the Napocor’s debts through the universal charge for stranded debts and stranded contract costs paid in the monthly electricity bill. He cited estimates that power consumers shelled out P0.1938 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 P0.2203 per kilowatt.
At the same time, the senator aired a warning that Filipino households may “suffer even more” from pass-on charges as the cash flow projection of the Power Sector Assets and Liabilities Management Corp. (PSALM), the government corporation which inherited Napocor’s debts, “shows the necessity of collecting an accumulated universal charge of P0.5593 per kilowatt-hour from the year 2020 to 2026 unless the bill becomes law.”
By his computation, Gatchalian said “this may translate to an additional charge of P111.86 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.”
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 to pay the stranded contract costs and stranded debts would, Gatchalian said, “help lower electricity rates and provide significant consumer savings for Filipinos.”
He added that for a household consuming 200 kilowatt-hours per month, this would result in savings of P109.34 per month, or P1,312.08 per year.
Adequate safeguards were included in the proposed law, Gatchalian added, easing fears of fund disbursement abuses once the law is enacted.
He cited a provision that PSALM may only tap the fund after it has already applied the collections from its different sources of revenue. He said the funds to be used for the power debt payment servicing will be allocated through the General Appropriations Act.
According to Gatchalian, once the obligations have been fully paid, the remaining funds will be remitted to the Special Fund used to finance energy resource exploration, development and exploitation programs.