A lawmaker wants the government to subsidize power consumers to spare them the brunt of power rate increases.
Rep. Reynaldo Umali of Oriental Mindoro, chairman of the House Committee on Energy, said the government can use the Malampaya funds to shield electricity users from the P4.15 per kilowatt-hour increase charged by the Manila Electric Co. (Meralco).
He made the proposal after the Philippine Independent Power Producers Association (PIPPA) warned that if power distribution firms like Meralco are not able to pay power generators, then they would not have enough cash to pay for fuel, a situation that could result in blackouts.
The PIPPA issued the statement after the Supreme Court stopped Meralco from implementing the unprecedented P4.15 rate hike.
“What PIPPA said is the reality of business. That is why subsidy from the government thru the Malampaya fund is the best solution here. Meralco may have the resources to pay their dues without the hike, but the law allows them to pass on charges to consumers. Why would they shoulder the dues if they are allowed to pass it to consumers? The law is on their side,” Umali said, referring to the Electric Power Industry Reform Act.
The Malampaya fund comes from the payments of oil companies Caltex and Shell for extracting natural gas in Malampaya oil field in Palawan province. Under the law, the Malampaya fund should be used to finance energy resource development and exploitation, as well as other energy related programs and projects of the government as may be directed by the President.
The Supreme Court blocked the use of the Malampaya fund amid the filing of plunder and graft-related complaints against incumbent and former government officials over the alleged misuse of the P900-million natural gas fund.
The Palace also wants to tap the Malampaya fund as a source of a subsidy for power consumers. While a government subsidy would be a presidential discretion, Umali is convinced that consumers’ interest carries a greater weight.
“When you govern, you have to take risks. And that [using the Malampaya fund as subsidy]is the risk that the government has to take now,” he said.