Filipinos can look forward to reduced electricity rates in the near future. This is after the two chambers of Congress voted, on third and final reading, a bill that will help settle the obligations of the National Power Corporation (NPC).
Once signed into law, House Bill No. 8869 will allow the using a portion of the Net National Government Share from the Malampaya Natural Gas Project fund to subsidize the payment to NPC’s Stranded Contract Cost (SCC) and Stranded Debts (SD) until 2023.
Republic Act No. 9136, or the Electric Power Industry Reform Act, defines SCC as the excess of the contracted costs of electricity under eligible contracts over the actual selling price of the contracted energy output of such agreements in the market.
Distribution utility costs is another term for SCC.
On the other hand, the said law defines SD as ‘any unpaid financial obligations of the NPC which have not been liquidated by the proceeds from the sales and privatization of NPC assets.’
Provision of the bill
Section 5 of the bill provides for the utilization of P123 billion by the Power Sector Assets and Liabilities Management (PSALM) to settle its obligation until 2023.
These debts comprise parts of the universal charges reflected in the monthly electricity bill. Consumers pay these, on top of the regular electricity consumption cost and other charges.
The bill also states that the net national government share will be collected and kept as a special fund to finance exploration and development, if the SCC and the SD have been paid before the termination of the PSALM’s corporate life.
In addition, the bill will allocate an amount of P25 billion from the P221-billion Malampaya fund for the exploration projects of the Philippine National Oil Company Exploration Corporation.
Energy Committee Chairman and Marinduque Representative Lord Allan Jay Q. Velasco said that the legislation will result in a P 0.574 reduction in the cost of kilowatt-per-hour. This translates to savings worth P115 for an average of 200 kilowatts per hour consumption per month.
The House of Representatives’ version of the bill has garnered 171 affirmative votes, six negative votes, and zero abstention. Meanwhile, 17 senators voted in favor of the bill, zero negative votes, and no abstention.