November 18, 2019 | 12:31 am
THE ENERGY DEPARTMENT
has released the draft implementing rules and regulations (IRR) for the Murang
Kuryente Act, the law that allowed the use of the existing and future government
share in the Malampaya gas-to-power project as payment for government debt now
shouldered by consumers.
“The Department of
Energy (DoE) is hereby requesting all interested parties to submit their
comments on the working Draft Implementing Rules and Regulations to Republic
Act No. 11371, An Act Reducing Electricity Rates by Allocating a Portion of the
Net National Government Share from the Malampaya Natural Gas Project for the
Payment of the Stranded Contract Costs and Stranded Debts,” the agency said.
The DoE said it was
accepting comments until Nov. 22 through Mario C. Marasigan, director and
officer-in-charge of the DoE’s Electric Power Industry Management Bureau. A
public consultation is also scheduled that day.
The IRR of R.A. 11371,
which was approved on Aug. 8, is expected to bring down the cost of power after
its signing by the secretaries of the Energy and the Finance departments.
Senator Sherwin T.
Gatchalian, chairman of the Senate energy committee, had said that he expected
the law to remove the P0.09 per kilowatt-hour being paid by consumers as
“universal charges” to pay the stranded debts and stranded contract costs when
the government built energy-related projects to avoid power crises in the past.
He had said in the next
six years, the universal charges that consumers find in their monthly
electricity bill could go as high as P0.90/kWh.
The charges being
collected from consumers are remitted to state-led Power Sector Assets and
Liabilities Management Corp. (PSALM), which previously expected the universal
charges to rise to P0.86/kWh.
For PSALM, the law
meant savings from incurring additional borrowing costs in order to settle the
maturing obligations of the National Power Corp. (Napocor), the government
company that led the construction of the energy-related projects of the past.
PSALM said for families
consuming an average of 200 kWh per month, the law meant about P172 of monthly
savings from reduced electricity cost or about P2,064 of savings per year.
The Malampaya funds
would cover PSALM’s shortfalls on a yearly basis and it would not have to seek
additional universal charge impositions on electricity consumers.
Under the IRR, the
Murang Kuryente Fund will be set up to fund the payment of all anticipated
shortfalls after applying PSALM’s collections from the privatization of
Napocor’s assets, independent power producer contracts, and proceeds from
operations of existing assets.
Annual allocations from
the Murang Kuryente Fund as intended in the act will be included in the General
Appropriations Act starting with fiscal year 2021 until the exhaustion of the
allocated amount.
Originally, the
Malampaya fund was intended to be used for exploration and development, but
with the new law, its use has been expanded to include the payment of the loans
incurred by Napocor. The law says that after these loans had been paid, the
fund will go back to its previous coverage, which is for oil exploration and
development.
Murang Kuryente Fund
refers to the amount of P208 billion taken from the Malampaya fund that has
been allocated specifically for R.A. 11371.
“In the event that
Anticipated Shortfalls are fully paid before the exhaustion of the Murang
Kuryente Fund, the remainder of the amount allocated shall be utilized to
finance energy resource development and exploitation programs pursuant to
Presidential Decree No. 910,” the draft IRR reads.
The Murang Kuryente
Fund will cover the anticipated shortfalls for the years 2020 up to the end of
PSALM’s corporate life.
Mr. Gatchalian
previously said that the outstanding Napocor loans that consumers were paying
was about P450 billion and it is staggered over the next six years. — Victor
V. Saulon
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