Malampaya fund eyed to reduce electricity rates

Danessa Rivera (The Philippine Star) - July 20, 2018 - 12:00am

https://www.philstar.com/business/2018/07/20/1834972/malampaya-fund-eyed-reduce-electricity-rates

MANILA, Philippines — A proposal to use the Malampaya fund to reduce power rates by 70 centavo per kilowatt-hour (kwh) will be proposed in the Senate.

Sen. Sherwin Gatchalian said his committee is working on a proposal to use the energy resource development fund – commonly known as the Malampaya fund – to lower electricity rates by at least 70 centavos per kwh.

“We’ve had hearings and we will have one more hearing and then we will be sponsoring it hopefully within the year,” he said, noting the proposal is among the priority measures of Malacañang.

“Hopefully, we’ll file it within 30 days,” Gatchalian said.

The Senate Committee on Energy has conducted several meetings with the Power Sector Assets and Liabilities Management Corp. (PSALM) to crunch the numbers.

During the meetings, the lawmaker said PSALM’s debt stood at P460 billion as of end-2017. The Malampaya fund has a balance of P204.1 billion.

Meanwhile, computations showed at least a minimum of 70 centavos per kwh can be reduced in electricity bills of consumers if the Malampaya fund would be used to pay off the stranded contract costs (SCCs) and stranded debts (SD) of National Power Corp. (Napocor).

“We will use Malampaya [fund] for the next six years to avoid minimum of 70 centavos per kwh. We’re virtually eliminating universal charge (UC) except missionary,” Gatchalian said.

The UC is a pass-on rate to consumers to cover the Napocor’s SD and SCC, missionary electrification and the environmental fund.

SCC refers to the excess of Napocor’s contracted cost of electricity with independent power producers over the actual selling price of the output.

On the other hand, SD refers to any unpaid financial obligations which have not been liquidated by the proceeds from the sales and privatization of Napocor assets.

Sen. Ralph Recto sponsored Senate bill 924, which details the use of the  Malampaya fund for the payment of SCC and SD to directly benefit power consumers and place the 60 percent government share from the fund under the scrutiny of Congress through the General Appropriations Act (GAA).