Consumers can expect a cut in their electricity bills after President Rodrigo Duterte signed a law paying P208 billion in debts of the state-owned National Power Corp. (Napocor) using earnings from the Malampaya natural gas project in Palawan.

A family consuming 200 kilowatt-hours of electricity a month can expect the power bill to go down by P172 a month, said Sen. Sherwin Gatchalian, one of the authors of the “Murang Kuryente Bill” (“Cheaper Electricity Bill”), now Republic Act 11371.

Passage of the bill, signed by Duterte on Aug. 8, means universal charges for stranded debts and stranded contract costs incurred by Napocor will soon be removed from electricity bills, the senator said.

Stranded debts refer to Napocor debts left unsettled despite the sale of its assets, while stranded contract costs are financial obligations arising from take-or-pay contracts entered into with private power producers during the power crisis in the 1990s.

The P208 billion will come from the state’s 60 percent share in the income of the Malampaya natural gas project off Palawan developed by a consortium led by Shell, from which the national government gets about P20 billion annually.

Napocor had incurred P1.24 trillion in debt, which had been pared down by the state-run Power Sector Assets and Liabilities Management Corp., an entity formed by a 2001 power industry reform act, to P436.1 billion as of the first quarter of 2019. (