Murang Kuryente subsidy to take effect next year

THE Power Sector Assets & Liabilities Management Corp.(PSALM) said the government’s subsidy for some universal charges will take effect next year, removing some of the cost from electricity bills.

PSALM was replying to a query from Senator Risa N. Hontiveros-Baraquel during a Joint Congressional Energy Commission hearing. Ms. Hontiveros-Baraquel brought up the government’s P208 billion subsidy which will relieve consumers from paying the universal charges for stranded contract cost (UC-SCC) and stranded debt (UC-SD).

The costs must be provided for in the General Appropriations Act (GAA), as provided in the implementing rules and regulations (IRR) of the Republic Act No. 11371, or the Murang Kuryente Act, according to PSALM President Irene B. Garcia.

“Once it is included in the GAA and funding is provided, we will no longer file for new UC applications. However, ‘yun pong current na UC na we see in our electricity bills, those are continuing po, (the current UC appearing in our electricity bills will still be charged)” she added.

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 the two universal charges, including as well as the anticipated shortfalls or deficits incurred from paying these obligations.

The IRR for the law was released in April, and as a result the subsidy will need to be budgeted for in 2021.

“Hindi po kasi agad nagawa ang IRR (The IRR wasn’t prepared in time), and therefore the DBM (Deparment of Budget and Management) and DoF (Department of Finance) said (the universal charges) cannot be included in the budget, so we will have to wait for next year,” Ms. Garcia explained.

PSALM is currently not collecting the UC-SCC, in compliance with the IRR, but it is still receiving the P0.0428 per kilowatt-hour UC-SD charged to consumers.

“No new UC [applications] will be approved but ‘yung mga dating na-approve po, tuloy-tuloy po (those previously approved UC applications are still in effect),” Ms. Garcia added.

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. Collections from these are remitted to PSALM.

Stranded debt, which is assumed by PSALM, are unpaid financial obligations of the National Power Corp. which have not been liquidated by the proceeds from the sals and privatization of its assets.

Should there be a remainder from the fund allocation after the payments of these costs are completed, the law states that the remaining amount must be used to finance energy resource development and exploitation programs of the Energy Development Board. — Adam J. Ang