IRR of law reducing cost of electricity signed
By BusinessMirror -April 21, 2020
The Department of Energy (DOE) and the Department of Finance (DOF) have signed the implementing rules and regulations (IRR) for the Murang Kuryente Act (MKA), which mandates cheaper electricity.
The IRR for the MKA is in the DOE-DOF joint circular signed by Finance Secretary Carlos G. Dominguez III and Energy Secretary Alfonso G. Cusi. The circular was approved in consultation with the Department of Budget and Management, the Bureau of the Treasury, and the Power Sector Assets and Liabilities Management Corp. (PSALM).
The MKA, which was signed by President Duterte on August 8, 2019, legislates the use of P208 billion from the Malampaya Fund for the payment of PSALM’s stranded contract costs (SCC) and stranded debts (SD) that PSALM assumed from the National Power Corp.
The IRR shall take effect 15 days upon publication.
Sections 2.4 and 9.1 of the MKA’s IRR state that no new Universal Charges (UC) for SCC and SD shall be collected upon effectivity of the IRR, while Section 9.2 provides that, “PSALM shall not file with the Energy Regulatory Commission (ERC) any new petition for UC stranded contract costs and stranded debts until the P208 billion allocated amount under this Act (MKA) is exhausted and no other allocations are made by Congress.”
“We are glad that the IRR has finally been signed. This gives consumers relief from paying an estimated total additional amount of P0.86 per kilowatt-hour of UC SCC and UC SD covering up to year 2024,” said PSALM President Irene Besido-Garcia.
This P0.86/kWh is the estimated total UC for SCC and SD covering: the UC petitions of PSALM pending in the ERC at the rate of P0.3007/kWh and the future UC petitions of PSALM that it will file with ERC with impact of P0.5593/kWh.
For a household consuming 200 kWh electricity, this translates to about P172 of monthly savings from reduced electricity rates, or an annual savings of P2,064.
The ERC-approved UC-SD of P0.0428/kWh and UC-SCC of P0.0543/kWh or a total of P0.0971/kWh were being collected from all electricity end-users. However, effective February, the collection of the UC-SCC ceased in view of the full recovery by PSALM of the ERC-approved amount for SCC. Thus, only the UC-SD at the rate of P0.0428/kWh is currently being collected from all electricity end-users.
PSALM said the IRR outlines the documentary requirements, timeline, responsibilities and functions of concerned agencies tasked to implement the law.
In particular, it specifies the processes of determining the annual allocation from the Malampaya Fund through the General Appropriations Act, consistent with the fiscal program of the government, and the releases of approved amounts to PSALM for the payment of its SCC, SD, and corresponding anticipated shortfalls.
PSALM is tasked to ensure consistent record-keeping of disbursements and report the utilization of the fund to oversight agencies including the ERC and the Joint Congressional Energy Commission.
