DOE: Malampaya fund can be used to pay NPC debts

By  Lenie Lectura – April 1, 2017

from Business Mirror

The Department of Energy (DOE) strongly  urged lawmakers to pass a legislation that will allow the government to tap the Malampaya fund in paying the stranded debts of the National Power Corp. (NPC).

This, after the Energy Regulatory Commission (ERC) allowed the Power Sector Assets and Liabilities Management Corp. (PSALM) to continue the collection of stranded contract cost from end-consumers.

“Since the Malampaya fund has a specific use, we can’t utilize it, except for energy-resource development,” Energy Undersecretary Felix William Fuentebella said.

“PSALM has presented projections to us that by end of 2026, or PSALM’s corporate life, there will be a deficit of P245.6 billion,” Fuentebella said. “So, because of that, there’s a proposal to the Cabinet cluster to use the Malampaya fund, or the energy-resource development fund, specifically to address the issue on universal charge stranded contract cost and stranded debts.”

For this to be implemented, Fuentebella said “it can’t be done on an executive order alone. It has to be coursed through a legislation”. The DOE official said the proposal, if approved, should be implemented soon. “The debts will just balloon. Sana mas mabilis, kasi by 2019 mas mataas iyung mag mamature na debts.”

The ERC recently allowed PSALM to continue the collection of P0.19 per kilowatt-hour in stranded contract cost.

From 2007 to 2017, a total of P48 billion was already collected from consumers via the universal charge stranded contract cost.  The ERC allowed PSALM to collect P5 billion more by charging an additional P0.19 per kWh.