Declaration of Policy
- The State's policy is to protect public interest by ensuring reliable, secure, and affordable electric power supply.
- It aims to implement transparent policies to ensure reasonable electricity prices by minimizing universal charges related to stranded contract costs and stranded debts.
Definition of Key Terms
- Joint Congressional Energy Commission (JCEC): A congressional body under the Electric Power Industry Reform Act (EPIRA) and Energy Efficiency and Conservation Act.
- Malampaya Fund: Government share from the Malampaya Natural Gas Project's net proceeds, held as a special account to fund energy development per Presidential Decree No. 910.
- Malampaya Natural Gas Project: Refers to Service Contract 38 offshore Northwest Palawan.
- Net Government Share: 60% share of national government from net production proceeds after deductions mandated by law.
- Net National Government Share: National government’s share after subtracting local government shares.
- Net Production Proceeds: Gross proceeds minus Filipino Participation Incentive and operating expenses.
- Stranded Contract Costs of NPC: Excess costs under independent power producer contracts approved as of December 31, 2000.
- Stranded Debts of NPC: Unpaid financial obligations of NPC not liquidated through asset sales.
- Universal Charge: Non-bypassable monthly charge collected from all electricity end users by distribution utilities.
Allocation and Use of Malampaya Fund
- PHP 208 billion from the net national government share of the Malampaya fund shall pay stranded contract costs and stranded debts assumed by PSALM.
- This allocation covers anticipated shortfalls in payments after applying PSALM’s collections from asset privatizations and IPP contracts.
- Annual allocations must be included in the General Appropriations Act aligned with the government's fiscal program.
- Excess proceeds beyond PHP 208 billion remain in the special account for energy resource development.
- The Department of Budget and Management is tasked with timely fund release to PSALM.
- If liabilities are fully paid before fund exhaustion, the remainder is used for energy development under Presidential Decree No. 910.
- Universal charges currently collected may be offset by the Malampaya fund allocation subject to implementing rules.
Reporting and Transparency Requirements
- PSALM shall submit annual projected and actual cash flow statements on stranded costs, debts, and payment schedules to DOE, ERC, DOF, DBM, and JCEC.
- Projected cash flow statements are due before June 30 each preceding year; actual statements before June 30 the following year.
- There must be regular coordination among PSALM, DOE, DOF, and DBM for consistent record-keeping of Malampaya fund disbursements.
- PSALM reports are to be made publicly accessible via its website.
Congressional Oversight
- The Joint Congressional Energy Commission (JCEC) shall oversee the Act's implementation upon effectivity.
Implementing Rules and Regulations
- Within 90 days from effectivity, DOE and DOF, in consultation with DBM, Bureau of Treasury, and PSALM, shall promulgate rules for fund disposition and implementation.
- No new universal charges for stranded costs and debts shall be collected once implementing rules are in effect.
Separability Clause
- If any provision is declared invalid or unconstitutional, other provisions not affected shall remain in full force.
Amendatory Clause
- Section 8 of Presidential Decree No. 910 is amended regarding the use of the Special Account in the general fund.
Repealing Clause
- All laws, issuances, and regulations inconsistent with this Act are repealed or modified accordingly.
Effectivity
- The Act takes effect 15 days after its publication in the Official Gazette or a newspaper of general circulation.