ELECTRICITY end-users will no longer be burdened with additional charges in their electricity bills after the Power Sector Assets and Liabilities Management Corp. (Psalm) announced it will no longer pass on universal charge to customers.
President Rodrigo Duterte signed into bill Republic Act (RA) 11371 or the “Murang Kuryente Act” on August 8 aimed at lowering electricity rates by tapping P208 billion from the net government share of the Malampaya funds to pay for the stranded contract costs and stranded debts of the National Power Corp.
The Department of Budget and Management (DBM) is responsible for ensuring the timely release of the amounts allocated and appropriated to the Psalm in accordance with its debt and independent power producer payment schedule.
In case the stranded contract costs and stranded debts, including all anticipated shortfalls, are fully paid, the remaining amount will be used to finance energy resource development and exploration programs under Presidential Decree 910.
“The Malampaya funds will cover Psalm’s shortfalls on a yearly basis and it will not have to seek additional universal charge impositions on electricity consumers,” Psalm President and Chief Executive Officer Irene Joy Garcia said on Tuesday.
Garcia said the newly signed law will lower power rates and spare them from incurring additional borrowing costs to settle Napocor’s maturing obligations.
“Psalm believes this law will unburden power customers from paying additional universal charge for stranded contract costs and stranded debts that could possibly amount to P0.86 per kilowatt-hour,” she added.
Households consuming an average of 200 per kWh every month can save about P172 a month or P2,064 per year.
“This is a meaningful and viable step towards the significant reduction of PSALM’s financial obligations unburdening the ordinary consumer from paying stranded costs in the future,” Garcia said.
The state-run corporation expressed its gratitude to members of the Senate Committee on Energy led by Sen. Sherwin Gatchalian and members of the House of Representatives Committee on Energy led by Rep. Lord Allan Velasco for prioritizing the welfare of electricity consumers through the passage of this important legislation.
Psalm is mandated by RA 9136 or Electric Power Industry Reform Act (Epira) law to sell the remaining assets and settle the financial obligations of Napocor.
To repay Napocor’s debt, Psalm recovers universal charge from consumers to cover stranded contract costs (SCC) and stranded debts (SD) of Napocor, as levied in their monthly electricity bills.
Psalm defines SCC as the excess of the Napocor’s contracted cost of electricity under independent power producers (IPPs) over the actual selling price of the output, while SD is Napocor’s financial obligations which have not been liquidated by the proceeds from the sales of state power assets.