Implementing Rules and Regulations of the Murang Kuryente Act Signed

20 Apr 2020

Power consumers can now look forward to the implementation of Republic Act No. 11371, known as the “Murang Kuryente Act” (MKA). Finance Secretary Carlos G. Dominguez and Energy Secretary Alfonso G. Cusi have signed the Joint Circular No.1, Series of 2020 to operationalize the provisions of the MKA.

The Implementing Rules and Regulations (IRR) for the MKA as contained in the Department of Finance and Department of Energy Joint Circular No. 1, were approved in consultation with the Department of Budget and Management, the Bureau of the Treasury, and PSALM.

The MKA, which was signed by President Rodrigo Roa Duterte on 08 August 2019, legislates the use of P208 Billion from the Malampaya Fund for the payment of PSALM’s stranded contract costs (SCC) and stranded debts (SD) that PSALM assumed from the National Power Corporation.

Sections 2.4 and 9.1 of the MKA’s IRR state that no new Universal Charges (UC) for SCC and SD shall be collected upon effectivity of the IRR, while Section 9.2 provides that, “PSALM shall not file with the ERC any new petition for UC stranded contract costs and stranded debts until the PhP208 Billion allocated amount under this Act [MKA] is exhausted and no other allocations are made by Congress.”

PSALM President and CEO, Irene Besido Garcia, says “We are glad that the IRR has finally been signed. This gives consumers relief from paying an estimated total additional amount of P0.86 per kilowatt-hour of UC SCC and UC SD covering up to year 2024.” This P0.86/kWh is the estimated total UC SCC and SD covering: (a) the UC petitions of PSALM pending in the Energy Regulatory Commission (ERC) at the rate of P0.3007/kWh and (b) the future UC petitions of PSALM that it will file with ERC with impact of P0.5593/kWh.

For a household consuming 200 kWh electricity, this translates to about P172.00 of monthly savings from reduced electricity rates, or an annual savings of P2,064.00.

The ERC-approved UC-SD of P0.0428/kWh and UC-SCC of P0.0543/kWh or a total of P0.0971/kWh were being collected from all electricity end-users, however, effective February 2020, the collection of the UC-SCC ceased in view of the full recovery by PSALM of the ERC-approved amount for SCC. Thus, only the UC-SD at the rate of P0.0428/kWh is currently being collected from all electricity end-users.

The IRR outlines the documentary requirements, timeline, responsibilities and functions of concerned agencies tasked to implement the law. In particular, it specifies the processes of determining the annual allocation from the Malampaya fund through the General Appropriations Act, consistent with the fiscal program of the government, and the releases of approved amounts to PSALM for the payment of its SCC, SD, and corresponding anticipated shortfalls. PSALM is tasked to ensure consistent recordkeeping of disbursements and report the utilization of the fund to oversight agencies including the ERC and the Joint Congressional Energy Commission.

The IRR shall take effect fifteen days (15) from the date of its publication in the Official Gazette or in a newspaper of general circulation.

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