P208-Billion funds from Malampaya Deep Water Gas-to-Power Projecct in Palawan will benefit the electric consumers across the country with the signing of Murang Kuryente Act also known as Republic Act 11361 by President Rodrigo Duterte last week.
The Malampaya Deep Water Gas-to-Power Project, which involves natural gas exploration and extraction from the depths of the sea off Palawan, is a joint venture between the government and the private sector.
The “Murang Kuryente Act” allows the use of government share from the Malampaya natural gas project to settle obligations of the National Power Corporation (NPC).
Prior to the passage of the law, these debts are charged to electric consumers nationwide through the universal charge (UC) in their monthly electricity bill which is collected by the distribution utilities.
“It is hereby declared the policy of the State to protect public interest by ensuring the provision of reliable, secure and affordable supply of electric power to consumers,” the law reads.
“The State shall implement policies and programs to ensure transparent and reasonable prices of electricity to consumers by minimizing the universal charges for stranded contract costs and stranded debts,” it added.
Under the new law, P208 billion of the proceeds of the net government share from the Malampaya fund will be used for the payment of NPC’s stranded contract costs and stranded debts. If the obligations are fully paid before the funds are exhausted, the remainder of the amount will be used to finance energy resource development and exploration programs.
Senator Sherwin Gatchalian, sponsor of the measure, pushed for the passage of the Murang Kuryente bill, saying the use of Malampaya fund would help lower the cost of electricity in the country.
Gatchalian said the implementation of the law would result in ₱172 monthly savings in household consuming 200 kilowatt hour per month.
The Malampaya natural gas field offshore Palawan, which supplies about 50% of power in Luzon, is expected to be fully consumed by 2029.
But in a previous interview with an official of the joint venture partners of the Malampaya Natural Gas Project, they are confident that its reserves will still go beyond its expected 2029 lifespan.
The province of Palawan has lost its claim to 40% of the total government earnings from the Malampaya gas project after the Supreme Court ruled that Palawan has no share to it, ending a more than 10 years’ legal battle.
The province of Palawan claimed that under the Local Government Code and the 1987 Constitution, it is entitled to 40% of the national government’s 60%.