Press Release
April 1, 2019

Gatchalian: Murang Kuryente Act to lower electricity rates

Filipino consumers will feel less burdened paying their electricity bills once the government's share of the Malampaya fund is tapped to cover the stranded debts and contract costs of the National Power Corporation (NPC) instead of expanding the coverage and increasing the lifeline rate subsidy, Senator Win Gatchalian said.

Gatchalian, chair of the Senate Committee on Energy, made the statement in reaction to the claim of The Power for People (P4P) Coalition that the Murang Kuryente bill, which was recently approved by the bicameral conference committee, was insufficient to reduce the high cost of electricity.

Contrary to the claim of the civil society group, Gatchalian maintained that using the Malampaya fund to pay off the stranded contract costs and stranded debt of NPC is substantial enough to lower power costs than using it in expanding the coverage and increasing subsidies for households which use small amounts of electricity through the lifeline rates.

"Based on our internal research, we determined that increasing subsidies and expanding the coverage of lifetime rates with the use of the net profit share earned by the government from the operation of the Malampaya Natural Gas Project will have little impact on the average household," the lawmaker said.

"Isa pa, dahil continuing charge ang lifeline rate subsidy, kapag naubos na ang Malampaya fund ay tuloy-tuloy pa rin ang pagbabayad ng nakararaming Pilipino sa lifeline rate subsidy. One time lang ang relief ng mga consumers." he added.

To illustrate his point, Gatchalian explained that lifeline rates - a subsidy for those consuming less than 100 kilowatt hour (kWh) per month - are already being implemented. Households consuming more than 100kWh shoulder the lifeline rates.

Using the Malampaya fund to subsidize the lifeline rates will only give an average household consuming 200kWh a total monthly savings of ₱21.54 - equivalent to a half kilo of rice - compared with the ₱172 monthly savings that the same household will get with the implementation of the Murang Kuryente Act. Gatchalian said the bigger savings may be used to buy an additional three to four kilos of rice per month or roughly a sack of rice per year.

On the issue that consumers should not be paying for NPC's stranded debts and costly contracts, Gatchalian said the Supreme Court (SC) had already decided in 2007 the constitutionality of these universal charges.

"Why are they questioning these stranded debts and contract costs only now? They should have sought immediate legal remedy to prevent us consumers from shouldering this burden. However, the reality is, we have paid and are still paying for these debts right now, through the universal charges," Gatchalian said.

The lawmaker estimated that power consumers have already shelled out ₱0.1938 per kilowatt hour from January 2013 to May 2017 to pay for NPC's debts through the universal charge for stranded debts and stranded contract costs. Meanwhile, from June 2017 to December 2018, Filipino households paid ₱0.2203 per kilowatt hour.

Nevertheless, he expressed optimism that the Murang Kuryente bill, which was approved by the Bicameral Conference Committee early this month, would be signed by the President before the 17th Congress adjourns.

"For the longest time, Filipinos have been burdened by NPC's debts through the universal charges for stranded debts and stranded contract costs incorporated in the monthly electricity bill. I hope President Duterte will sign this landmark bill immediately for the Filipino people to finally receive tangible benefits from the Malampaya Fund as soon as possible," Gatchalian said.

The bill is set to be ratified by both Houses of Congress when session resumes in May.

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