By Myrna M. Velasco
With the application of the Malampaya fund on rate reduction, about P0.70 per kilowatt-hour (kwh) of universal charges being passed on by Power Sector Assets and Liabilities Management Corporation (PSALM) will prospectively be wiped out in the electric bills of Filipino consumers.
This is the stimulating factor then for the Senate Committee on Energy to fast-track deliberations on a proposed measure enabling utilization of the Malampaya fund to retire the remaining liabilities of PSALM.
With the state-run firm’s debts and stranded liabilities totally expunged from its books, this will result in avoided cost of P0.70 per kwh for all ratepayers – which in essence, will redound to power rates reduction.
“It will amount to P0.70 per kwh reduction, we’ve met with PSALM twice to really crunch the numbers,” Senator Sherwin T. Gatchalian, who also chairs the Senate energy committee, has noted.
This is one measure, he added, wherein his committee in the Senate already has its meeting of the mind with its counterpart body in the Lower House.
The application of the Malampaya fund-anchored rate reduction will be six to seven years – or until the end of PSALM’s corporate life in year 2026.
It will be applied on the P466.1-billion stranded debts and stranded contract costs of PSALM – as reckoned from the company’s end-2017 financial statements.
Gatchalian said if legislative proposals will already be approved on the utilization of the Malampaya fund on rate reduction, PSALM can be spared from filing new applications for universal charges.
“We will use Malampaya fund for the next six years to avoid minimum P0.70 per kwh. We’re virtually eliminating universal charges, except missionary,” the lawmaker said.
The legislative proposal, he said, will likely be tackled in the Senate floors this year and they are targeting an enactment of the proposed law at the soonest possible time.
The approved UC rate of PSALM for stranded contract costs had been at P0.1938 per kWh – that was based on the last decision rendered by the Energy Regulatory Commission.
In the case of universal charge for missionary electrification, Gatchalian indicated that it shall be tackled separately, with proposed rationalization of such subsidy scheme for these off-grid areas.