Malampaya funds can cut down power rates, senator says

Gov’t urged to use Malampaya funds to cut down power rates

A government official has called on to use the Malampaya funds to slightly bring down power rates by covering the prospective charges to consumers sought by the Power Sector Assets and Liabilities Management Corp. (PSALM).

Senator Sherwin Gatchalian said that the current balance of the Malampaya funds – or the Energy Resource Development Fund – isn’t enough to pay off the stranded costs and debts of the National Power Corp. (Napocor).

“The focus here is to find ways to pay for stranded costs and stranded debts,” he said. Gatchalian said in a report.

PSALM has financial obligations worth P491 billion. These are not being charged to consumers.

The entity also has pending applications with the Energy Regulatory Commission (ERC) to recover P233.24 billion worth of contract costs (SCC) and stranded debts (SD), PSALM officer-in-charge for finance Luisa Esteban said in a report.

Both the SCC and SD are passed on to consumers through the universal charge, along with the missionary electrification and environmental fund.

Department of Energy secretary Alfonso Cusi earlier called to use the Malampaya funds to pay for Napocor’s financial obligations rather than passing it on to the consumers, as one way to lower power rates in the country.