UC charges removal in bills urged

Published January 5, 2020, 12:00 AM

by manilabulletin_admin


Consumer advocacy group Laban Konsyumer, Inc. (LKI) has filed a petition before the Energy Regulatory Commission (ERC) seeking the immediate phase-out of the two-tiered universal charges (UCs) line items in the electric bills.

The plea has also been directed to various relevant government agencies as respondents – chiefly the state-run Power Sector Assets and Liabilities Management Corporation (PSALM) being the administrator of the UC charges on stranded debts (UC-SD) and stranded contract costs (UC-SCC); then the Department of Energy (DOE), Department of Finance (DOF), Department of Budget and Management (DBM) and Bureau of the Treasury (BTr) which in turn will be the entities in-charge of implementing the rate reduction mandated under the Murang Kuryente Act or Republic Act 11371.

“Petitioners respectfully pray that the Honorable Commission, henceforth, order PSALM to stop the collection of all forms of universal charges from the consumers and for the nominal parties Meralco (Manila Electric Company) and members of PEPOA (Private Electric Power Operators Association) to remove all universal charges in the billing statement of all their customers,” LKI has stipulated.

In his filing with the ERC, LKI President Victorio Mario A. Dimagiba argued that “due to the effectivitiy of the Act (RA 11371), there are no more legal basis for PSALM to continue collecting from the consumers’ pockets the sum of approximately ₱5.0 billion for 2020.”

With the Muryang Kuryente Act, the national government through the DBM will be allocating funds (chargeable against the Malampaya fund) to absorb the shortfall in PSALM’s collection of universal charges for stranded debts and stranded contract costs.

The framers of the law portended that with the earmarked P208 billion from the Malampaya fund for such purpose, the UC-SD and UC-SCC components in the electric bills could already be totally wiped out, hence, resulting on rate reduction in the overall electricity bills of Filipino consumers.

The target of implementation of the law should have been this year, but since its effectivity and the crafting of its implementing rules and regulations (IRR) came later than NG’s submission of budget to Congress, timelines are now getting pushed back.

Given the circumstances, Dimagiba’s petition is eyeing to have the implementation accelerated so consumers will no longer shoulder the UC line items in their power bills starting this year.

PSALM President Irene Joy B. Garcia previously indicated to media that the collection of 5.43 centavos per kilowatt hour (kWh) UC for stranded contract costs as previously approved by the ERC will carry on until June this year; while the UC-SD of 4.28 centavos per kWh will be continually be billed until the end of the firm’s corporate life in 2026.

The UC-SCC is being passed on in the electric bills to account for costs that the contracted independent power producers (IPPs) would not have been able to fully recoup from the market; while UC-SD would comprise the fraction of the power sector loans that cannot be fully covered by proceeds of the privatization of the National Power Corporation’s (NPC) assets.

There are various UC items being collected via the electric bills – including those on missionary electrification; renewable energy development cash incentive; and environmental charge, but the Murang Kuryente Act primarily targets to take away the UCs on stranded debts and stranded contract costs.