Tap Malampaya fund to ease power consumer woes after rates hike–Recto

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MONDAY, 01 AUGUST 2011 20:28 BUTCH FERNANDEZ / REPORTER

THE Aquino administration could draw on proceeds from the Malampaya natural-gas project to ease the impact of a new round of power-rate increase on overburdened consumers.

Sen. Ralph Recto recommended this option in the face of an estimated 39 to 40 centavos upward adjustment in the universal power charge expected to be passed on anew to users of electricity.

He pointed out that electricity consumers, already reeling from soaring consumer prices and utilities like electricity and water, badly need a relief from another power rate increase.

Recto explained that power users are bound to pay an additional 39 centavos per kilowatt hour in their monthly electricity bills once the Energy Regulatory Commission (ERC) approves the proposal of the Power Sector Assets and Liabilities Management (PSALM) to pass on to electricity consumers the National Power Corp.’s (Napocor) P139-billion outstanding stranded debts and stranded contract costs which, he said, is “another form of tax called Universal Charge.”

PSALM seeks to collect the additional 39 centavos from power users for a period of 15 years, he added.

The senator suggested that the Malampaya proceeds collected every year should now be included in the national budget and be specifically channeled to programmed obligations such as “subsidy to power users.”

In a statement, Recto proposed that Malampaya proceeds collected since June 30, 2010, and even up to last year be tapped to reduce future power rate hikes and pay for the so-called stranded contract costs and stranded debts of the Napocor.

According to the senator, “the Malampaya funds have been the proverbial “wang-wang” of past governments, wherein funds were treated like a special kitty and used with impunity without no clear accountability.”

Recto, who chairs the Senate ways and means committee, added that “a glaring proof of this is the virtual dissipation of the P200-billion Malampaya proceeds that were collected by the national government since 2002.”

He predicted that the government’s take from Malampaya is bound to triple once the expansion plans of the Malampaya consortium, led by Shell Philippines and Chevron Malampaya Llc. go full blast in August. The consortium is composed of Shell Philippines Exploration B.V. and Chevron Malampaya Llc., each with 45 percent, as well as PNOC-EC which has a 10-percent stake.

Recto recalled that Malampaya was declared commercially operable in 2002 and is estimated to have 2.7 trillion cubic feet of natural gas with a service contract lasting up to 2024 with the consortium moving for an extension up to 2039.

At the same time, he asked the national government to render a full disclosure on how much Malampaya funds have been collected since President Aquino assumed office in June last year.

“Finding the P200-billion Malampaya funds is proving to be difficult than Finding Nemo, but surely and in the spirit of transparency, the government could now account for the billions collected since June 2010,” he stressed.