The consumers’ conundrum

Published January 9, 2021, 6:00 AM

by Atty. Vic Dimagiba


Republic Act No. 11371, or known as the Murang Kuryente Act, was signed by President Rodrigo Duterte on August 8, 2019, and became effective fifteen (15) days after its publication in the Official Gazette on August 23, 2019.

Under that law, electricity consumers will not pay the stranded debts and stranded contract costs   of the National Power Corporation   and its successor, the Power Sector Assets and Liability Management Corporation. 


Consumers at  the moment pay in their  electricity   bill the stranded debts of  four  centavos per kwh,  and for the rest of the corporate life of PSALM , another  estimated eighty six centavos per kwh. 


Exactly a year  ago, Laban Konsyumer Inc. filed a Petition with the Energy Regulatory Commission to immediately implement the law and stop PSALM from passing on to the consumers all forms of stranded debts and costs to the consumers. This Petition is pending resolution.


Section 4 of the law provided that the Malampaya Funds may be utilized for the payment of the stranded contract costs and stranded debts.  An amount of P208   billion from the government share from the Malampaya Natural Gas project was allocated for the payment of the stranded contract costs and stranded debts.

However, the Comment of the Solicitor General submitted to the Energy Regulatory Commission added to the confusion of the consumers regarding the implementation as well as enjoyment of the benefits of the law.

 Paragraph 21 of the   Comment of the Solicitor General, alleged that consumers need not be flustered or bothered by the intricacies and rigors of government protocols concerning the law, because the procedures and requirements of the allocation and appropriation of the funds under the Murang Kuryente Act, through the issuance of the rules is essential for the orderly, systematic, effective and efficient implementation of the Act.

Further, in paragraph 24 of the Solicitor General’s Comment, the government lawyer said, that in any event, the Act states  that the use of the Malampaya Funds is merely “permissible” and not “mandatory “as the word “may “does not mean “shall” or “must,”

However, Senator Win Gatchalian, the principal author of the law, wrote on January 27, 2020 to the Secretary of Finance and requested that the current stranded debts and costs of nine centavos be included in the coverage of the allocated amount of P208 billion allocated for the Murang Kuryente Act. That letter“fell on deaf ears.”

Senator Gatchalian wrote a second letter to  the Secretary of Finance on November 27, 2020 stressing the urgency regarding the implementation of the Murang Kuryente Act.  I was copied this letter and let me share the relevant portions, to quote:  

“Last 20 October 2020 the Committee on Finance (Subcommittee E) conducted a hearing on the proposed FY 2021 budget of the National Electrification Administration, National Power Corporation, Philippine National Oil Company, and Power Sector Assets and Liabilities Management Corporation (PSALM).  During the hearing, it was mentioned that only P8 billion was approved for FY 2021 from the P208 billion allocated amount from the Malampaya Fund pursuant to Republic Act No. 11371 otherwise known as the Murang Kuryente Act.  As a result, PSALM will have to borrow P38.04 billion and will incur an additional borrowing cost of P5.45 billion.  “


“In line with this, I would like to remind your good office that the intent of the Murang Kuryente Act is for the P208 billion allocated amount to cover all the stranded contract costs (SCC), stranded debts (SD), and all anticipated shortfalls so no other universal charge (UC) petitions will be filed in the future. “

“Thus, by allocating an amount lower than the what is needed by PSALM to pay SCC, SD, and anticipated shortfalls, it may lead to the increase of PSALM’s debts and even a possible revival of the UCs for SCC and SD once the P208 billion allocated amount is utilized– a situation which is inimical to the intent of the Murang Kuryente Act. “

“As such, I would like to implore your good office in the next and future budget cycles to approve the amounts needed by PSALM from the Php 208 billion allocated amount to fulfill the intent of the law all for the benefit of the consumers”.


The consumers’ conundrum.

Atty.Vic Dimagiba, President of Laban Konsyumer Inc.

Email at [email protected]