Murang Kuryente bill deemed not enough to lower power cost

by Danessa Rivera, The Philippine Star, Jan 28, 2019

MANILA, Philippines — Civil society groups have called for the overhaul of the Electric Power Industry Reform Act (EPIRA) of 2001, saying the current energy reforms are not enough to reduce the high cost of electricity.

The Power for People (P4P) Coalition called for the complete removal of pass-on provisions, expanding subsidies for impoverished consumers, rejecting the entrance of more coal in the energy mix, and combating corruption in the Energy Regulatory Commission (ERC).

“While we are glad that the problem of costly energy is front and center in the chambers of Congress, it will only continue to be felt by consumers if fundamental changes are not introduced and made into law,” P4P convenor and Center for Energy, Ecology, and Development (CEED) executive director Gerry Arances said.

The coalition zeroed in on the Murang Kuryente Bill which aims to use the Malampaya fund to cover the stranded debts and contract costs incurred by the National Power Corp.

Arances said Filipino consumers should not actually be paying for these stranded debts and costly contracts.

“The Malampaya fund could be more properly put to use in order to benefit ordinary end-users directly, like in expanding the coverage and increasing subsidies for households which use small amounts of electricity through the lifeline rates,” he said.

The pending bill seeks to allocate P123 billion of the Malampaya Fund for the payment of the National Power Corp.’s (Napocor) stranded contract costs and stranded debts transferred to and assumed by the Power Sector Assets and Liabilities Management Corp. (PSALM) until 2023.

This will result in consumers saving 57 centavos per kilowatt hour (kwh) in electricity bills.

“To put things in perspective, the P123 billion to be sourced from the Malampaya fund to pay off Napocor’s debt is already enough to provide 3.5 million households with one 200 watts solar photovoltaic (PV) system each,” Arances said.

“Instead, while consumers may not pay for it in their bills, they are paying for it with the benefits they could have reaped from the Malampaya fund,” he said.

Meanwhile, the Freedom from Debt Coalition (FDC) said using the Malampaya fund would only let consumers shoulder the bail out from costly deals of government with independent power producers (IPPs).

“We have continually called for the renegotiation of contracts entered into by the Ramos administration with local and foreign IPPs, as they have been found to be supplying electricity at a much higher price than other power producers,” said FDC’s Manjette Lopez.

“Consumers have been at the losing end, paying for the price of these unnecessarily costly contracts ever since they were brokered, and PSALM has repeatedly over the years negotiated on behalf of IPPs for higher rates to be passed on to the public,” she said.

The coalition also noted the growing share of coal in the country’s energy mix, which would be stranded in the future with the rise of renewable energy technology.

“A study has found that all coal-fired power plants to go online in the Philippines will become stranded assets, and many of those operating are already in various levels of stranding,” said De Torres. “Despite this, the administration remains adamant in pursuing more coal projects, with 3,500 MW of coal to go online this year alone,” said Avril De Torres of CEED.