The House of Representatives has ratified the bicameral conference report reconciling the disagreeing provisions of House Bill 8869 and Senate Bill 1950, which both seek to reduce electricity rates by allocating the net 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).
House Bill 8869 is principally authored by Rep. Winnie Castelo (2nd District, Quezon City) while SB 1950 is authored by Senators Ralph Recto, Win Gatchalian, Joseph Victor Ejercito and Sonny Angara.
SB 1950 is authored by Senators Ralph Recto, Sherwin Gatchalian, Joseph Victor Ejercito and Sonny Angara.
The proposed “Murang Kuryente Act” states that it is the policy of the State to protect public interest by ensuring 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) 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 government share of the Malampaya fund to be used for energy resource development and exploitation programs.
The Department of Budget and Management shall ensure the timely release of the amounts allocated and appropriated to the PSALM in accordance with its debt and independent power producer payment schedule.
The DBM shall ensure the timely release of the amounts allocated and appropriated to PSALM.”
Should stranded contract costs, stranded debts, and anticipated shortfalls in the course of the payment of such liabilities are fully paid before the exhaustion of the amount allocated in the measure, the amount allocated shall be utilized to finance energy resource development and exploitation programs.
The universal charges for stranded contract costs and stranded debts currently being collected may be covered by the allocated amount from the Malampaya fund.
Regular reports shall be expected from the PSALM. It shall submit an annual projected cash flow statement and an annual actual cash flow statement of the stranded contract costs, stranded debts, and anticipated shortfalls as well as its debt payment and independent power producer contract payment schedule to the Department of Energy (DOE), Energy Regulatory Commission (ERC), Department of Finance (DOF), DBM, and the Joint Congressional Energy Commission (JCEC).
Upon the effectivity of the measure, the JCEC shall exercise oversight powers over its implementation.