Senator Sherwin Gatchalian said on Wednesday urged the Department of Finance (DOF) to look for additional funds for the implementation of the Murang Kuryente Act next year and spare power consumers from new borrowings.
Gatchalian, chair of the Senate Committee on Energy, made the call after learning that less than 20 percent or only P8-billion of the P46-billion requested by the Power Sector Assets and Liabilities Management (PSALM) Corp. in its 2021 budget was allocated by the DOF for next year’s implementation of the law.
The senator noted PSALM would have to resort to borrowing for the additional P38.4-billion.
The senator said it is imperative that the agency avoid having to pass on the added cost from new borrowings to power consumers.
During the recent budget deliberations on the PSALM’s proposed budget for 2021, the senator was told that taxpayers — who are also power consumers — will bear the brunt of covering the P5.45-billion borrowing cost.
“That is not the spirit and intention of the law. We have to request the DOF to seriously look into this because P5.45 billion is a hefty amount,” Gatchalian said.
“If we will be incurring additional costs then it will still be passed on to the taxpayers because PSALM will need to borrow,” he pointed out.
“The law intends to save interests and borrowing costs but obviously that is not happening in this case,” he lamented.
The Murang Kuryente Act was enacted to spare consumers from paying the universal charges for stranded contract costs (UC-SCC) and stranded debts (UCSD) in their electricity bills by subsidizing these costs using the P208-billion net proceeds representing the government’s share from the Malampaya Gas-to-Power Project.
But according to the senator, each household is still paying P0.0428 per kilowatt hour for UCSD that should be removed.
“Consumers will not see it in their electricity bill. But indirectly, it’s also the taxpayers who will be paying an additional P5.45-billion in one way or the other. You can always argue that it’s (money) moving from one pocket to the other,” Gatchalian noted.