Senator Win Gatchalian has put to task the Department of Finance (DOF) in providing for sufficient budget and in sparing the taxpayers from being choked by new borrowings to fund next year’s obligations of the Murang Kuryente Act.
Gatchalian learned that less than 20 percent or only P8 billion of the P46 billion requested by the Power Sector Assets and Liabilities Management (PSALM) Corporation in their 2021 budget was allocated by the DOF for next year’s implementation of the Murang Kuryente Act.
As a result, PSALM will have to resort to borrowing for the additional P38.4 billion and taxpayers will bear the brunt of covering the P5.45 billion borrowing cost, the senator was told during the recent budget deliberations of PSALM’s 2021 budget.
“That is not the spirit and intention of the law. We have to request the DOF to seriously look into this because the P5.45 billion is a hefty amount. If we will be incurring additional costs then it will still be passed on to the taxpayers because PSALM will need to borrow,” the Senate Energy Committee Chairman commented.
“The law intends to save interests and borrowing costs but obviously that is not happening in this case,” Gatchalian added.
The Murang Kuryente Act spares consumers from paying the universal charges for stranded contract costs (UC-SCC) and stranded debts (UCSD) in their electricity bills. But each household is still paying P0.0428 per kilowatt hour for UCSD that should be removed, according to the senator, citing that the law states that P208 billions of proceeds from the Malampaya natural gas project will be used to pay for the two items.
The stranded contract costs are the excess of the contracted cost of electricity under eligible independent power producer contracts over the actual selling price of the contracted energy output while stranded debts are those unpaid financial obligations of the National Power Corporation which have not been liquidated by the proceeds from the sales and privatization of its assets.
“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 through one way or the other. You can always argue that it’s one pocket to the other,” Gatchalian said.