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DoE, House dip power rates

AJ Bajo



The Department of Energy (DoE) yesterday welcomed moves by the House Committee on Energy to find ways to subsidize household electricity rates.

The committee, presided over by 1-CARE Partylist Rep. Carlos Ramon Uybarreta, gave the green light to a measure that seeks to reduce electricity rates through payment of stranded debts and contract costs of the state-owned National Power Corporation (NPC).

These costs are being passed on to consumers at the moment.

The proposed measure will be known as the “Murang Kuryente” bill. It is scheduled for discussion at the plenary before it goes to a second and third and final reading.

The bill aims to tap the Malampaya fund to pay for the NPC’s stranded debts. The Malampaya fund amounts to about P123 billion.

Energy Secretary Alfonso G. Cusi is supportive of measures to lower electricity rates in favor of low power for household consumers.

It was Cusi who earlier had proposed to tap the Malampaya funds to pay for NPC’s stranded costs and debts, instead of passing on the burden to consumers.

“There could be a 57 centavo per kilowatt hour cut in electricity billings when the Malampaya subsidy becomes effective,” Uybarreta said.

“The technical working group has completed its task, the House energy committee unanimously approved it,” he added.

The Malampaya Fund came from pooled money from the royalty government collected from the Malampaya gas project in Palawan.

The stranded contract costs of the NPC are defined by the Electric Power Industry Reform Act (EPIRA) law as an “excess of the contracted cost of electricity under eligible contracts over the actual selling price of the contracted energy output of such contracts in the market.”

The EPIRA also defined stranded debts as “any unpaid financial obligations of NPC which have not been liquidated by the proceeds of the sales and privatization of NPC assets.”


Stranded cost is paid by consumers under the universal charges in their monthly electric bills.

All of the NPC’s obligations and stranded contract costs are then assumed by the Power Sector Assets and Liabilities Management (PSALM) Corporation which the House committee wants authorized to use the P123 billion Malampaya fund to pay for NPC’s stranded debts until 2023.

The technical working group headed by House Energy Panel Chair Lord Allan Velasco consolidated three House bills – HB 8082, 8327 and 8352 that became the substitute bill approved by the committee.

“If all goes well, the House can have the Murang Kuryente Act passed on second reading this week and third and final reading the following week, before the House adjourns session on 6 February,” Uybarreta said.

With Hananeel Bordey

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