The Department of Energy (“DOE”) and the Department of Finance (“DOF”) have issued Joint Circular No. 1, s. 2020, or the “Implementing Rules And Regulations Of Republic Act No. 11371, ‘An Act Reducing Electricity Rates By Allocating A Portion Of The Net National Government Share From The Malampaya Natural Gas Project For The Payment Of The Stranded Contract Costs And Stranded Debts’ Otherwise Known As The ‘Murang Kuryente Act’” (“IRR”).
R.A. No. 11371 declares as policy the implementation of policies and programs to ensure transparent and reasonable process of electricity to consumer by minimizing the universal charges for stranded contract costs and stranded debts. Thus, the IRR, which takes effect fifteen (15) days from its publication on 20 April 2020 in a newspaper of general circulation, or on 05 May 2020, states the following:
1. No new universal charges for stranded contract costs and stranded debts shall be collected upon the effectivity of the IRR (Section 9.1). To this end, the Power Sector Assets and Liabilities Management Corporation (“PSALM”) is proscribed from filing with the Energy Regulatory Commission any new petition for universal charges for stranded contract costs and stranded debts until allocated amount under R.A. No. 11371 is exhausted and no other allocations are made by Congress (Section 9.2).
2. The IRR provides for the general principles, procedures, documentary requirements and timeline for the disposition of the Two Hundred Eight Billion Pesos (P208,000,000,000.00) proceeds, or the Murang Kuryente Special Account in the General Fund (“MK-SAGF”), of the net National Government share from the Malampaya Fund (Sections 2 and 5). The Malampaya Fund is included in the General Appropriations Act and allocated to the PSALM budget, consistent with the fiscal program of the government (Section 2.3).
3. The MK-SAGF shall cover annually the stranded contract costs, stranded debts and anticipated shortfalls not recovered by the PSALM through the universal charges up to the end of its corporate life (Section 5.1). Moreover, the universal charges for stranded contracts costs and stranded debts currently being collected and remitted to the PSALM may be covered by the allocated amount from the MK-SAGF, subject to the fiscal program of the government (Section 5.1).
4. Pursuant to this, the PSALM Board is tasked to determine, verify and confirm the total amount of stranded contract costs, stranded debts and anticipated shortfalls for fiscal years 2020 to 2026 (Section 5.2). This amount shall be DOF’s review and recommendation and the Department of Budget and Management’s assessment of said recommendation (Section 6).