Cheaper power on the horizon

CHEAPER electricity may soon be enjoyed by consumers.

Up for President Rodrigo Duterte’s signature is the ratified Murang Kuryente Act.

Ahead of the session adjournment, the House of Representatives has ratified the bicameral conference report reconciling the disagreeing provisions of House Bill 8869 and Senate Bill 1950, both of which seek to reduce electricity rates.

Under the bill, the electricity rates will be reduced by allocating the national government share from the Malampaya Natural Gas Project for the payment of the stranded contract costs and stranded debts of the National Power Corporation (NPC).

The proposed “Murang Kuryente Act” mandates provision of reliable, secure, and affordable supply of electric power to consumers.

It defines the Malampaya fund as the existing and future government share from the net production proceeds—the balance of gross proceeds after deducting the Filipino Participation incentive, if any, and all operating expenses—of the Malampaya Natural Gas Project.

Meanwhile, stranded contract costs refer to the excess of the contracted cost of electricity under eligible independent power producer contracts over the actual selling price of the contracted energy output of such contracts in the market.

Stranded debts refer to any unpaid financial obligations of the NPC which have not been liquidated by the proceeds from the sales and privatization of NPC assets.

The bill provides that P208 billion of the proceeds of the net national government share from the Malampaya fund shall be utilized for the payment of stranded contract costs of and stranded debts of the NPC.

The Malampaya fund shall further be used to cover all anticipated shortfalls in the course of payment of such liabilities after applying the Power Sector Assets and Liabilities Management Corporation (PSALM’s) collections from privatization of the NPC’s assets, independent power producers’ contracts, and proceeds from operations of existing assets.

This is provided, however, that the annual allocations from the Malampaya fund for the payment of stranded contact costs and stranded debts, including all anticipated shortfalls, shall be included in the General Appropriations Act consistent with the fiscal program of the government. Moreover, any remaining and future proceeds of the net national government share from the Malampaya fund over and above the amount indicated in the measure shall remain in the Special Account in the general fund to finance energy resource development and exploitation programs.

Finally, the use of the Malampaya fund shall not impair in any way the use or application of the remaining amount or future proceeds of the net national.