THE Department of Energy (DOE) urged lawmakers to pass legislation allowing the government to tap the Malampaya fund to pay for the debts incurred by the National Power Corp. (Napocor) over the years.
This, after the Energy Regulatory Commission (ERC) recently allowed the Power Sector Assets and Liabilities Management (PSALM) Corp. to collect from consumers the amount of P37 billion, spread over a nine-year period with a rate of P0.0265/kilowatt-hour (kWh).
The collection of the said amount will be reflected in universal charge (UC) component of a consumers’ electricity bill starting next billing period from the receipt of the relevant ERC decision by the distribution utilities (DUs.)
“Discussions on this have yet to be firmed up in Congress. Even though the ERC has approved PSALM’s application, there is still time for Congress to pass a law that will allow the government to tap the energy resource development fund, commonly known as the Malampaya fund,” said DOE Undersecretary Felix William Fuentebella, who explained a timely enactment of a law could eventually stop the implementation of the ERC order.
“That option to tap the Malampaya fund is still there despite the ERC approval on Psalm’s recent application,” Fuentebella added. “There is still a chance so we hope lawmakers can look at it and determine if the fund can be utilized to pay for such.”
He said the present administration has yet to utilize a single centavo from the Malampaya fund.
The government’s share from the energy resource development fund reached P13.43 billion in 2016, slightly lower than the P14.32 billion recorded a year earlier. About P5,374,201,272.14 of the fund was allocated as “Source of Assistance to Local Government Unit” while the net share of the national government stood at P8,061,301,906.79.
In two separate orders dated July 7, the ERC allowed the recovery by Psalm of PP24.198 billion for UCstranded debt (SD) covering the 2011 and 2012 true-up adjustments.
For the stranded contract costs (SCC), which was already approved earlier by the commission, the Psalm was ordered to extend its collection for another 10 months providing PSALM P12.878 billion recoveries covering calendar years 2011, 2012 and 2013.
The said amount will be recovered at the existing UC-SCC rate, the ERC said. Thus, there is no increase or decrease in the UC-SCC rate as the 10-month collection is only an extension.
The Electric Power Industry Reform Act (Epira) defines SD as “any unpaid financial obligations of the [Napocor], which have not been liquidated by the proceeds from the sales and privatization of [Napocor] assets.”
On the other hand, the Epira defines UC-SCC as the “excess of the contracted cost of electricity under eligible contracts over the actual selling price of the contracted energy.”
The Psalm continues to incur SD and SCC because the proceeds from privatization of NPC/Independent Power Producer (IPP) generation assets and the revenue generated from the Napocor-owned and IPP plants are not enough to pay its contractual obligations with the eligible IPPs and lending institutions.
The PSALM said the collection of P37 billion will relieve it from additional borrowings this year.
“Early recovery of said charges will partially infuse the needed monetary source to pay maturing obligations without resorting to refinancing. Contracting further loans is only a palliative solution that further widens PSALM’s stranded debts in the long run because of refinancing charges,” said Psalm Officer-in-Charge Lourdes Alzona.
The PSALM stressed that the SD and SCC charges are purposely intended to pay the remaining financial obligations that the government incurred when new power plants were constructed to end the power crisis that engulfed the whole country particularly in the 1990s and early 2000.
“The collection of UC-SD and SCC should be appreciated for its social inclusion value,” Alzona said. “Let’s look at it as a necessary contribution for the stable and quality supply of electricity we had enjoyed in the past and continue to enjoy nowadays.”