DOE targets 30-centavo cut in electric power rates

By Riza Lozada

The Department of Energy (DOE) is pursuing the removal of the value-add­ed-tax (VAT) on the systems-loss charge and the universal charge on stranded debts to bring down electric­ity rates.

“Consistent with its mandate to protect the consumers, the DOE en­dorsed to the Department of Finance (DOF) and the Bureau of Internal Rev­enue (BIR) the exemption of the Sys­tems Loss Charge from VAT, because it is not actually used by the consum­ers, and to attain the policy of true cost under Republic Act 9136, otherwise known as Electric Power Industry Re­form Act [Epira],” a DOE statement said.

The removal of the two com­ponents of monthly electricity bills, however, would need amendments to the Epira by Congress.

Under the DOE propos­al, an estimated P245 billion in debts of the state-owned National Power Corp. (Na­pocor) to independent power producers would be retired through the use of funds from the government share in the Malampaya natural-gas proj­ect.

The use of the Malam­paya fund for the retirement of the stranded debts would need another legislation since the Malampaya fund under a Marcos-era decree creating it could only be used for ener­gy-related projects.

The DOE said the remov­al of both charges would re­duce electricity costs by an average of about 30 centavos per kilowatt hour.

In its report on its ac­complishments in the first 100 days of the Duterte ad­ministration, the DOE said its achievement pertained to the issue of the royalty tax on the Malampaya natural-gas proj­ect.

“Pursuant to the De­partment of Energy’s com­mitment to maintain and strengthen the predictability, certainty and consistency of investment rules of the coun­try, the DOE affirmed its posi­tion in its Motion for Recon­sideration pending before the Commission on Audit that the income tax of the Malampaya contractor shall form part of the 60-percent government share,” the DOE said.

In terms of national elec­trification target, the DOE reported that some 10,000 households were given elec­tricity services, mainly from the poor areas with assis­tance from the Manila Electric Co. (Meralco) and the Nation­al Housing Authority (NHA).

Energy Secretary Alfonso Cusi said the DOE’s target is full electricity services for the country to support inclusive development, with key focus in Mindanao.

“A total of 89.6 percent of the country has been electri­fied, but the remaining areas, mostly in Mindanao, pose the greatest challenge because they are the farthest and can­not be cost-efficiently con­nected to the grid,” Cusi said.

As of September 29, the DOE said missionary electri­fication was improved in the Camotes Electric Coopera­tive Inc. (Camotes Islands), the Quezon Electric Coopera­tive Inc. (Polillo Island), the Ta­wi-Tawi Electric Cooperative nc. (Bongao), the Province of Siquijor Electric Coopera­tive Inc. (additional supply in Siquijor), the Lubang Electric Cooperative (Lubang Island), and the Marinduque Electric Cooperative Inc.

Various electric coop­eratives, however, are ex­posed to financial problems. The DOE said the National Electrification Administration (NEA), which is under the agency, was ordered to come up with recommendations in addressing the financial and management problems of the 10 ailing cooperatives which are the Abra Electric Cooper­ative Inc. (Abreco), the Pam­panga III Electric Cooperative Inc. (Pelco III), the Camarines Sur III Electric Cooperative (Casureco III), the Albay Elec­tric Cooperative Inc. (Aleco), the Masbate Electric Coop­erative Inc. (Maselco), the Maguindanao Electric Co­operative Inc. (Magelco), the Lanao Sur Electric Coopera­tive Inc. (Lasureco), the Bas­ilan Electric Cooperative Inc. (Baselco), the Sulu Electric Cooperative Inc. (Suleco) and the Tawi-Tawi Electric Coop­erative Inc. (Tawelco)

“Similarly, the DOE di­rected the technical audit of all electric cooperatives served by the Napocor-Small Power Utilities Group in order to ensure the reliable quality, and affordable supply of elec­tricity which started in Orien­tal Mindoro. This includes the review of all their power sup­ply contracts,” according to the DOE.

The Energy department and the European Union have also launched the Access to Sustainable Energy Program (Asep), a project designed to support the electrification program of the government and the development of re­newable energy in the coun­try.

Energy Undersecretary Felix William Fuentebella said the project aims to cover all areas, especially in the re­mote barangays all over the country.

The project hopes to provide clean energy solu­tions to 100,000 households or roughly 500,000 people in three to four years.

The EU conceptualized Asep in coordination with the DOE. Asep is mandated to add 20 megawatts of addi­tional renewable-energy proj­ects to brighten up the more than half a million people in far-flung barangays all over the country.

When asked what will be the specific role of DOE, EU Ambassador Franz Jessen said the financing agreement specifies that there is a time­line, but this will run for three to four years.

“It depends on how far the money is being spent and getting into the community in need,” he said.

EU provided a P3-billion initial grant for the project but it could double the amount based on the progress of the energy cooperation program.

“We actually have some flexibility in our development cooperation programs and it depends very much on how the needs in the Philippines develop. And how the objec­tives of the government they have developed overtime,” Jessen said.