Murang Kuryente Act of 2019
On August 8, 2019, Republic Act No. 11371 or The Murang Kuryente Act of 2019 was enacted. The law seeks to protect public interest by ensuring the provision of reliable, secure, and affordable supply of electric power to consumers. To this end, the law was passed to minimize the universal charges (UC) for stranded contract costs (SCC) and stranded debts (SD).[1] The law allows the utilization of the government’s share worth PhP 208 Billion from the Malampaya fund for the payment of stranded contract costs and stranded debts of the NPC.[2] Prior to this law, end-users contribute to the payment of the stranded contract costs and stranded debts as part of the universal charge.[3]
Competitive Selection Process
Another policy affecting cost is the competitive selection process (CSP) in the procurement by the DUs of power supply agreements for the captive market.[1] Issued on February 1, 2018, the CSP policy promotes competition and greater private sector participation in the provision of least-cost, reliable, and adequate supply of electricity by instituting a supply procurement process that is clear, transparent and fair. It follows the principles of (i) transparency in the CSP through wide dissemination of bid opportunities and participation of all generation companies; (ii) competitiveness, by extending equal opportunity to eligible and qualified generation companies to participate in the process; (iii) simplicity and efficiency in a streamlined procurement process; and (iv) accountability in the procurement process and implementation of the power supply agreements awarded under the CSP.[2]
Under this policy, DUs are required to establish a Third-Party Bids and Awards Committee (TPBAC) or Joint TPBAC or may opt to engage a Third-Party Auctioneer in lieu thereof. The TPBAC/Joint TPBAC is an independent body that will spearhead and manage the CSP.[3]
[1,2] Republic Act No. 11371 [3] Philippine Energy Plan 2020 [4,5,6] Department Circular No. 2018-02-003