Govt’s Malampaya share could reduce power rates

LAWMAKERS on Tuesday said electricity rates could be lowered by allocating the government’s share from the Malampaya Deep Water Gas-to-Power project to pay off stranded debts of the National Power Corp. (Napocor).

Marinduque Rep. Lord Allan Joy Velasco, chairman of the House Committee on Energy, and his panel vice chairman, Rep. Ramon Uybarreta of the 1st Consumers Alliance for Rural Energy Inc., have filed House Bill 8082, which aims to trim the financial obligations

of Napocor.

“This bill would provide substantial relief to power consumers in light of decisions promulgated by the Energy Regulatory Commission, to setting the universal charge for the recovery of Napocor’s stranded costs,” Velasco and Uybarreta said.

Instead of using the Malampaya fund to cover non-energy related programs and projects of national government agencies, the fund would now directly benefit the consumers, they added.

To make the disbursement transparent, a universal charge will be imposed on all electricity-end users to cover the payment instead.

The Malampaya project is a collaboration of the national government and the private sector represented by Shell Philippines Exploration B.V. (SPEX) on behalf of joint venture partners Chevron Malampaya LLC and the Philippine National Oil Corp. Exploration Corp.

Touted as “one of the largest and most significant industrial endeavors in Philippine history,” the project aimed to reduce the country’s dependence on imported fuel for its domestic and industrial power needs.

The Commission on Audit (CoA) previously rejected an appeal of the Department of Energy and the Office of the SolicitorGeneral to allow a consortium of the oil companies to keep the payment amounting to P146.8 billion worth of underpaid income taxes.

The CoA’s ruling upheld in 2015 was in accordance with Presidential Decrees 87 and 1459 mandating the minimum government share out of the Malampaya project’s earnings to be at least 60 percent.

The Malampaya project primarily revolves around extraction of natural gas from beneath the country’s waters to meet 30 percent of Luzon’s power generation requirements.

It was expected to provide 2,700 megawatts of power or substantial long-term revenue of some $10 billion to the Philippine government for 20 years starting June 2002.