House panel approves ‘Murang Kuryente Act’

After an hour-long discussion, the House Committee on Energy unani­mously passed on Tuesday a substitute bill, which seeks to allocate the net national government share from the Malampaya natural gas project to pay the stranded debts and the stranded contract costs of the National Power Corporation (Napocor), and other ex­ploration projects to develop energy resources and lower electricity rates.

The House panel, chaired by Marinduque Rep. Lord Allan Jay Ve­lasco approved the proposed “Murang Kuryente Act”, principally authored by Velasco, 1-CARE partylist Rep. Carlos Roman Uybarreta, Magdalo partylist Rep. Gary Alejano and Camarines Sur Rep. Luis Raymund Villafuerte.

It was COOP NATCCO partylist Rep. Anthony Bravo who moved for the approval of the bill.

Velasco, who chaired the technical working group (TWG) in scrutinizing and consolidating the three measures, said they agreed the use of P123 billion to pay the maturing debt obligations of the Power Sector Assets and Liabilities Management Corporation (PSALM) and maintain the Malampaya Fund as a “special fund” to finance energy development and exploitation programs and projects of the government.

Citing their second TWG meeting on November 20, 2018, he said the Department of Energy (DOE) reported that the total balance of the Malampaya fund was P221 billion as of September 2018, up from P214 billion in June 2018.

“The amount available to pay the stranded debts and stranded contract costs of the Napocor is P123 billion,” Velasco noted.

He disclosed that during the TWG meeting, PSALM reported that the Malam­paya fund was not enough to cover its ex­isting debt obligations. “For the year 2019, PSALM has to pay P90 billion, interest not included, and the cost of borrowings added to that amount,” he said.

The Napocor, the Energy Regulatory Commission (ERC), Meralco and Shell Philippines Exploration B.V. interposed no objection to the use of the Malampaya Fund to reduce the cost of electricity rates, according to Velasco.

Special trust fund

The Department of Budget and Man­agement (DBM) expressed reservations on the proposal to make the Malampaya Fund a special trust fund. They maintained that the fund should be classified as a general fund.

The Velasco panel adopted the sugges­tion made by the state-owned Philippine National Oil Company -Exploration Cor­poration (PNOC-EC) that the Malampaya Fund be used for exploration projects.

“Whatever the result of that exploration will eventually redound to the benefit of the entire country. Yun naman ang matagal nating sinasabi na we should prepare for the eventual drying up of Malampaya. We should have started exploration,” Uybar­reta said.

Under the unnumbered substitute bill, a portion from all the proceeds of the net national government share from the Malampaya Fund amounting to P123 billion shall be allocated solely for the payment of the NPC stranded contract costs and stranded debts transferred to and assumed by PSALM.

Under the measure, the P123 billion of the P204 billion Malampaya Fund may be used as payment of PSALM to NPC’s stranded debts and stranded contract costs, provided that the PSALM shall utilize P123 billion up to 2023 to settle its obligations.

The net national government share from the Malampaya Fund shall be remit­ted to a special trust fund to be adminis­tered by the PSALM, the bill provided.
The measure tasks the Department of Budget and Management (DBM) to provide a timely release of the amounts al­located and appropriated to the PSALM in accordance with its debt and independent power producer payment schedule.

When the stranded debts, stranded contract costs and anticipated shortfalls in the course of the payment of such facili­ties are fully paid before the termination of the corporate life of the PSALM, the net national government share shall accrue back to the special fund to finance energy resource exploration and development programs pursuant to Presidential Decree 910, according to the bill.

The PSALM is mandated to submit to the Department of Energy (DOE) an­nual actual and projected cash flow of the stranded debts, stranded contract costs and anticipated shortfalls as well as its schedule of debt payment and independent power producer contract payment to the DOE, ERC, DOF, DBM, and the Joint Con­gressional Power Commission (JCPC).

The submission of the annual projected cash flow shall be on or before June 30 of the preceding year and that of the annual actual cash flow shall be on or before June 30 of the succeeding year.

The bill mandates the Department of Energy (DOE), Department of Finance (DOF), DBM and the PSALM to promul­gate the necessary rules and regulations for the proper disposition of the funds and the effective implementation of the proposed Act.