Senate OKs ‘Murang Kuryente’ bill on 3rd reading

Infra & Development

The bill seeking to reduce the electricity rates by allocating the government’s share from the Malampaya natural gas project for the payment of the stranded contract costs and stranded debts, missionary electrification and environmental charges of the National Power Corp. (Napocor) and the feed-in-tariff allowance was approved by the Senate on third and final reading Monday afternoon.

The measure, authored by Senate President Pro-Tempore Ralph Recto, was approved by all of the 17 senators present in the plenary. It proposes to use the P207-billion Malampaya Fund to pay the said items which are passed on to consumers through the universal charge (UC) in the monthly electric bill.

In tapping the said fund to pay these obligations, it could save consumers more than P0.8474 per kilowatt hour (kWh), Sen. Win Gatchalian, chair of the Senate committee on energy and co-author of the bill, said.

Pursuant to Section 34 of the Electric Power Industry Reform Act (EPIRA), the Power Sector Assets and Liabilities Management Corp. (PSALM) will administer the funds generated from the universal charge. PSALM is an entity created under EPIRA to handle the privatization and finances of the National Power Corp. (Napocor).


Aside from the stranded contract costs and debts of the Napocor, the other components of the UC include the missionary electrification, which pertains to the charges imposed by Small Power Utilities Group (SPUG) which delivers power supply in areas not connected to the transmission system, and environmental charge.

Prior to the approval of the bill, the missionary electrification is being funded from the revenues from sales in the missionary areas and from the UC to be collected from all electricity end-users as determined by the Energy Regulatory Commission (ERC).

The universal charge is estimated to further increase in the coming years to pay off 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.


Recto said the said debts assumed by PSALM will hit P566.2 billion by 2026, when its corporate life will end and by 2031, the financial obligation shall be P595.6 billion – the increased amount due to repayments sourced from borrowings.

If allowed to be passed on to consumers, it will add P0.87 per kWh to their monthly electric bill.

The painless way in settling the said obligations, Recto said, is to tap the Malampaya Fund to wipe the slate clean.

In doing so, Gatchalian said this would result in savings of P169.48 per month and P2,033.76 per year, which would be enough for a household to buy an extra sack of rice.

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.

Aside from Gatchalian and Recto, Senators Sonny Angara and JV Ejercito were made co-authors of the measure. SENATE