OSG finds policy gap in use of ₱208-B Malampaya fund for power rate subsidy

The Office of the Solicitor General (OSG) caught sight of a policy infirmity that may not solidly allow the use of ₱208-billion Malampaya fund to subsidize the snipping of universal charge (UC) collections under the Murang Kuryente Act.

In an opinion issued by Solicitor General Jose C. Calida, it was stipulated that “the use of the Malampaya fund for the payment of universal charges, currently being collected is merely permissible, not mandatory.”

The OSG anchored that argument on the provision of the Murang Kuryente Act (MKA) which states that “the universal charge for stranded contract costs and stranded debts currently being collected may be covered by the allocated amount from the Malampaya fund subject to the implementing rules and regulations of (the) Act.”

The OSG pointed out that the use of the word “may” in the law turns out to be a weak precept, because that does not entail mandatory use of the fund for the MKA power rate reduction that has been calculated at ₱0.971 per kilowatt-hour.

As further emphasized by the OSG, “the phrase ‘may’ be covered by the allocated amount from the Malampaya fund should not be construed to mean ‘shall’ or ‘must’… instead, it should be interpreted on its ordinary sense as permissive or discretionary on the part of the respondents, whether or not to allot a portion of the Malampaya fund to cover for universal charges currently collected by PSALM (Power Sector Assets and Liabilities Management Corporation).”

PSALM is the entity sanctioned under the Electric Power Industry Reform Act (EPIRA) to administer the pass-on and collection of universal charges from all Filipino electricity ratepayers. For the UCs propounded to be subsidized by the Malampaya fund, such shall only cover the UCs for stranded debts and stranded contract costs.

Despite the ruling rendered by the OSG, Laban Konsyumer, Inc. President Victorio Mario Dimagiba, who has been batting for immediate implementation of the MKA power rate reduction, is leaning on the wisdom of the Energy Regulatory Commission (ERC) to act with dispatch on the pleaded stoppage of collection of the UCs for stranded debts and stranded contract costs.

“Hopefully, the ERC decides the case in favor of the consumers,” Dimagiba stressed, as he has been batting for the implementation of the MKA rate cuts since January this year.