Malampaya fund eyed to reduce electricity rates

A proposal to use the Malampaya fund to reduce power rates by 70 centavo per kilowatt-hour (kwh) will be proposed in the Senate.

Sen. Sherwin Gatchalian said his committee is working on a proposal to use the energy resource development fund – commonly known as the Malampaya fund – to lower electricity rates by at least 70 centavos per kwh.

“We’ve had hearings and we will have one more hearing and then we will be sponsoring it hopefully within the year,” he said, noting the proposal is among the priority measures of Malacañang.

“Hopefully, we’ll file it within 30 days,” Gatchalian said.

The Senate Committee on Energy has conducted several meetings with the Power Sector Assets and Liabilities Management Corp. (PSALM) to crunch the numbers.

During the meetings, the lawmaker said PSALM’s debt stood at P460 billion as of end2017. The Malampaya fund has a balance of P204.1 billion.

Meanwhile, computations showed at least a minimum of 70 centavos per kwh can be reduced in electricity bills of consumers if the Malampaya fund would be used to pay off the stranded contract costs (SCCs) and stranded debts (SD) of National Power Corp. (Napocor).

“We will use Malampaya [fund] for the next six years to avoid minimum of 70 centavos per kwh. We’re virtually eliminating universal charge (UC) except missionary,” Gatchalian said.

The UC is a pass-on rate to consumers to cover the Napocor’s SD and SCC, missionary electrification and the environmental fund.