With the new law, electricity consumers will soon no longer have to pay the universal charges for stranded contract costs and stranded debts in their electricity bills

Published 5:31 PM, August 13, 2019

Updated 5:31 PM, August 13, 2019

POWER CONCERNS. A new law reduces what electricity consumers in the Philippines have to pay for

POWER CONCERNS. A new law reduces what electricity consumers in the Philippines have to pay for

MANILA, Philippines – President Rodrigo Duterte has signed a law that spares Filipinos the burden of paying for certain costs in their electricity bill.

Senator Sherwin Gatchalian, chairman of the Senate committee on energy, announced on Tuesday, August 13, that Duterte has signed Republic Act No 11371 or the Murang Kuryente Act.

Duterte signed RA 11371 on August 8.

The law states that a portion of the national government’s share of the proceeds from the Malampaya Natural Gas Project will be used to pay for two items included in electricity rates paid by consumers.

These two items are the stranded contract costs and stranded debts.

Stranded contract costs refer to the excess of the contracted cost of electricity under eligible independent power producer contracts over the actual selling price of the contracted energy output.

Stranded debts refer to any unpaid financial obligations of the National Power Corporation which have not been liquidated by the proceeds from the sales and privatization of NPC assets.

According to the law, P208 billion of proceeds from the net national government share from the Malampaya fund will be used to pay the two items.

Gatchalian hailed the law as one way to make electricity more affordable. He said it was not fair for the debts of the NPC to be passed on to even poor Filipinos through the charges for stranded contract costs and stranded debts.

“A famly that consumes 200kWh (kilowatts and hour) per month can expect that there will be a P172 decrease in their electricity bill every month, equivalent to an additional 3 to 4 kilograms of rice per month,” he said in Filipino.

In the next months, consumers can expect the two universal charges to be deducted from their electricity bills. – Rappler.com

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