Energy, Finance dep’ts release implementing rules for Murang Kuryente Act
THE Department of Energy (DoE) and the Department of Finance (DoF) released the implementing rules and regulations (IRR) governing Republic Act No. 11371 or the Murang Kuryente Act. which relieves consumers of the universal charge for stranded contract costs (SCC) and stranded debt incurred by the National Power Corp. (NPC).
In August, President Rodrigo R. Duterte signed the law, which allocates P208 billion of the net proceeds of the government’s share from the Malampaya Natural Gas Project to cover these costs, including the anticipated shortfalls or deficits incurred from paying these obligations.
Both charges, which are collected by the government-led Power Sector Assets & Liabilities Management (PSALM) Corp., form part of the universal charge paid for by consumers in their monthly power bills.
Stranded contract costs are “the excess of the contracted cost of electricity under eligible IPP (independent power producer) contracts over the actual selling price of the contracted energy output of such contracts,” according to the IRR.
Stranded debt, on the other hand, consists of those unpaid NPC financial obligations which have not been liquidated by the proceeds from the sales and privatization of its assets.
The Malampaya gas-to-power project under the DoE-awarded Service Contract 38 is being developed by Udenna-controlled UC Malampaya Philippines Pte. Ltd., which has a 45% stake in the project, Shell Philippines Exploration B.V., which also has a 45% stake, and state-owned Philippine National Oil Co. Exploration Corp. (PNOC-EC), which owns the remaining 10%.
The IRR states that no new universal charges for both stranded contract costs and stranded debt are to be collected upon its effectivity.
Should there be an excess in the fund allocation after paying these costs, the law provides that the remainder must be used to finance energy resource development and exploitation programs of the Energy Development Board.
The IRR also requires such fund allocation to be included in the General Appropriations Act.
In February, PSALM announced its decision to stop collecting P0.0543 per kilowatt-hour (kWh) universal charge for SCC starting that month. This translates to a reduction of P5.43 for every 100 kWh of electricity consumption. — Adam J. Ang