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LKI 2020-001 Press Statement on NPC stranded debts and costs

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Facebook: Laban Konsyumer Inc.

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January 5, 2020


Consumer group Laban Konsuyumer Inc. (LKI) recently filed a petition to the Energy Regulatory Commission (ERC) calling for the immediate stop, effective immediately, of the collection of the NPC stranded costs and stranded debts in the current amounts of Php 0.0543/kwh and Php 0.0428/kwh or a total of Php0.0971/kwh from all consumers pursuant to Republic Act No. 11371 or the Murang Kuryente Act.

LKI President Vic Dimagiba stated in the petition that “Republic Act 11371 or the Murang Kuryente Act, was signed on August 8, 2019, and took effect on August 29, 2019, fifteen (15) after its publication or uploaded in the Official Gazette on August 14, 2019. The Murang Kuryente Act repealed Section 32 of Republic Act No.  9136 or the Electric Power Industry Reform Act of 2001 (EPIRA) as the latter law allowed the universal charges to be passed on and collected from all end users on a monthly basis by  the distribution utilities and reflected as a separate item in the consumer billing statement, in accordance with Section 10 on Repealing Clause of  Republic Act 11371.” 

Dimagiba continued by highlighting that “considering the effectivity of the Murang Kuryente Act and the self-explanatory Declaration of Policy in Section 2 of the Act, the consumers should immediately enjoy the removal of the universal charges for stranded contract costs and stranded debts in their electric bills which amounts to Php 0.0971 /kWh.” 

LKI stressed that “consumers are informed that under Section 4 of the Murang Kuryente Act, the sum of Php 208, 000,000,000.00 from the Malampaya Fund, shall be utilized for the payment of stranded contract costs and stranded debts transferred to and assumed by the Respondent Power Sector Assets and Liabilities Management Corporation or PSALM.”

The group went on to explain that the same Section 4 provided that the universal charges being collected from the consumers including any anticipated shortfall   may be covered by the allocated amount from the Malampaya Fund subject to the implementing rules and regulations. 

LKI expressed their belief that “the implementing rules and regulations shall include requirements on allocation and utilization of the Malampaya Fund amongst the Respondents and the Nominal Parties , and is not a condition prerequisite to the entitlement  of all end users to an immediate removal of the universal charges as an item in their billing statements as provided in the Act.”

Dimagiba voiced out that “consumers should not be involved nor affected in the procedures on allocation and appropriation of the Malampaya Fund in the General Appropriations Act nor in any loan borrowings to fund the Malampaya Fund.  These are financial and budgeting responsibilities solely to be performed and discharged by the Respondents.”

He went on to point out that “the consumers should not be allowed to wait for the issuance and promulgation of the implementing rules and regulations to enjoy the removal of the sum of Php 0.0971 per kwh universal charges in their electricity bill until   the issues and technicalities on   budget allocations, loan borrowings and other financial matters, are resolved between and amongst the Department of Budget and Management, the Department of Finance, the Department of Energy and Respondent PSALM in the utilization of the Malampaya Fund.  These are internal issues amongst the Respondents.”

As it stands now, the Respondents are beyond the statutory deadline of ninety (90) days from the effectivity of the Act, i.e. Section 7, to promulgate the implementing rules and regulations of the Act. 

Thus, Dimagiba stands that “consumers should fully enjoy the removal of the entire amount of Php 0.0971 per kwh immediately in their electric bills as any further delay in the removal of the universal charges works to the prejudice of the consumers as the amount of 5.43 centavos per kwh is scheduled to be fully paid by the consumers to Respondent PSALM by end of June 2020, quoting Ms. Myrna Velasco of Manila Bulletin Business News dated December 28, 2019 which quoted the Respondent PSALM   President Ms. Irene Joy Garcia.” 

The same news report stated that the amount of 4.28 centavos of universal charges shall continue to be paid by the consumers till 2026. Simply put… Due to the effectivity of the Act, there are no more legal basis for PSALM to continue collecting from the consumers’ pockets the sum of approximately Php 5.0 Billion for 2020.  

Dimagiba concluded with a release “that the Honorable Commission are clothed with powers and functions under Republic Act No. 9136 or the EPIRA law to order Respondent PSALM to henceforth stop the collection of all universal charges from all end users immediately. We respectfully pray that the Honorable Commission, henceforth order the Respondent PSALM Corporation to stop the collection of all forms of universal charges from the consumers and for the nominal parties Meralco and members of the PEPOA  to remove all universal charges in the billing statement of all their customers. Consumers must enjoy immediately this relief and remedy from having to be made to pay overly high rates because of these stranded costs and debts.”