AMID the looming hike in electricity prices caused by stranded power sector privatization costs, the Senate has approved on second reading a bill which will use a portion of the Malampaya collection to defray the additional power charges that will be passed on to consumers.
The measure, principally authored by Senator Ralph Recto and sponsored by Senator Win Gatchalian, taps a part of an estimated unspent P204 billion in government royalties from the Malampaya natural gas production to settle P244 billion in Power Sector Assets and Liabilities Management Corporation (PSALM) debts that will start to mature this year.
When the government sold off assets from the previous National Power Corp. state monopoly, it was left with outstanding liabilities which were not included in the sale.
The obligations were assumed by PSALM, which then passed these on to consumers through a Universal Charge, Recto explained.
“This explains why our electricity bill contains that seemingly innocuous item called Universal Charges or UC. It is where these stranded costs are lumped together with other unitemized payables,” Recto said.
Recto said this orphaned debt— “mga naiwang utang”— assumed by PSALM, will hit P566.2 billion by 2026, the year PSALM’s corporate life will end.
By the end of 2031, PSALM’s outstanding obligation is forecast to further rise to P595.6 billion as PSALM is expected to borrow to service payables.