Senate panel studying Malampaya fund usage

Published July 30, 2018, 4:25 PM

by AJ Siytangco

By Mario Casayuran

The Senate energy committee is studying the possibility of using the ₱204 billion Malampaya fund to reduce the universal charge (UC) paid by end-consumers on their monthly electricity bills which could result in household savings as high as ₱2,033.76 annually.

The committee chaired by Sen. Sherwin T. Gatchalian committee took up in its public hearing Monday Senate Bill 924 authored by Senate President Pro-Tempore Ralph G. Recto which proposes to allocate the net national government share from the Malampaya Natural Gas Project for the payment of the stranded contract costs (SCCs) and stranded debts (SDs) of the National Power Corporation (Napocor).

Sen. Sherwin T. Gatchalian  (Facebook / MANILA BULLETIN)
Sen. Sherwin T. Gatchalian

SCCs and SDs are components used to compute the UC imposed on consumers under the Energy EPIRA Law (RA 9136).

A universal charge is what is collected from consumers to pay for SCCs and SDs.

According to data presented by the Power Sector Assets and Liabilities Management Corporation (PSALM), applying the remaining ₱204 billion of the Malampaya Fund would avoid an increase of ₱0.8474 per kilowatt hour (kWh) in retail power rates. This would result in annual savings of ₱2,033.76 for an average household consuming 200 kWh per month.

“These savings are enough for an underprivileged household to buy two additional sacks of rice every year,” Gatchalian said.

Gatchalian explained that after the corporate life of PSALM expires in 2016, its the debt would be absorbed by taxpayers. PSALM’s current debt is P455 billion.

Gas from the Malampaya west of Palawan province will begin to dwindle in 2024.

He expressed support for the measure in principle, subject to further study on precisely how much of the remaining Malampaya funds should be applied for the purpose.

Gatchalian also took to task once more the embattled Energy Regulatory Commission (ERC) for several delays in the approval of SCC and SD rate applications.

According to PSALM, the various delays have resulted in an additional ₱34.78 billion of costs to be shouldered by consumers, equivalent to a power rate increase of ₱0.1973 per kWh.

Gatchalian then told ERC representatives at the hearing: “After all of your controversies, dadagdagan niyo pa si Juan Dela Cruz ng 34 billion pesos in costs dahil sa delay. This is absolutely unacceptable. Anong solusyon ang gagawin ninyo?” (You still add P34 billion to the shoulders of the consumers all because of your delays? What are your solutions?)

Lawyer Krisha Buela of ERC responded that the regulatory agency is currently conducting a review of its procedures and process flows to improve their work.

Gatchalian replied: “I’m telling you that there’s a problem in your procedures. It’s a 34-billion peso problem to be shouldered by the Filipino people.”

After the hearing, the senator reiterated the need to pass the ERC Governance Act (Senate Bill No. 1490) to foster transparency and accountability in the deliberations and decisions of the country’s independent power sector regulator.

The Malampaya Deep Water Gas-to-Power project is one of the largest and most significant industrial endeavors in Philippine history as it paved the way for the discovery of an alternative and indigenous source of energy as it reduced the country’s dependence on imported fuel for the bulk of its domestic and industrial power requirement.

The Bureau of Treasury reported that the Malampaya fund posted a total revenue collection of P224.34 billion since 2002 and an outstanding balance of P182.29 billion as of June 22, 2016.

Presidential Decree 910 has mandated that the government share from service contracts and agreements such as Malampaya Fund shall be used to finance energy resource development and exploration programs and projects as may be directed by the President.

‘’However, over the years, the annual revenue inflow from Malamapaya was used to fund non-energy related programs such as rice sufficiency programs, relief operations, and AFP (Armed Forces of the Philippines) Modernization Fund,’’ Recto explained.