Remove the Universal Charge
April 27, 2020CitizenWatch Philippines Statement
on the Murang Kuryente Act IRR
Remove the Universal Charge
CitizenWatch Philippines supports the recently enacted Murang Kuryente Act of 2019 which provides immediate relief to consumers by allowing the use of P208 Billion of the net government share from the Malampaya fund to pay the Universal Charge for Stranded Contract Costs (SCC) and Stranded Debts (SD) from the National Power Corporation’s / Power Sector Assets and Liabilities Management Corporation (PSALM), thereby removing these charges from the electricity bill of consumers.
Subject to the recently approved Implementing Rules and Regulations (IRR), the Universal Charge for SCC and SD currently being collected in electricity bills may be covered by the allocated amount from the Malampaya fund and that upon effectivity, there should also be no new Universal Charge for SCC and SD.
The IRR of the law also provides that the annual amount approved by the PSALM Board shall be based on PSALM’s projected cash flow statement of SCC and SD, including any SCC (and its associated borrowing cost) and SD that cannot be recovered from any petition approved by and pending with the Energy Regulatory Commission (ERC).
However, the IRR did not include the provision in the law allowing existing Universal Charge for SCC and SD to be included in the allocated amount from the Malampaya fund. To become consistent with the intent of the law to provide immediate relief to electricity consumers through lower rates, the existing Universal charge should be removed from the electricity bill.
We also call on the Energy Regulatory Commission to motu propio dismiss all pending Universal Charge SCC and SD petitions of the PSALM Corporation. This is to assure consumers that no new SCC and SD charges will be imposed.
It is but right that electricity consumers benefit from the Malampaya Fund as it comes from the payment of electricity bills with charges from the power plants using Malampaya Natural Gas.
Finally, we will expect that all reports relevant to the utilization of the P208 billion fund will be made public to ensure transparency.
For the Filipino consumer.
Vjohn Dizon
Co-convenor