Congress urged to reduce power cost

Sunstar Network

Monday, March 7, 2011

MANILA -– An advocacy group on Monday urged for the passage of two Senate bills, which aim to reduce electricity cost for end-consumers by as much as P2 per kilowatt-hour.

Throwing its support to Senate Bills (SB) 2 and 3 is the Center for Organizational Studies and Advocacy (Cosa), which also clarified the role of distribution utilities (DUs) such as Manila Electric Co. (Meralco) in determining power cost.

SB 2 cuts government royalties on indigenous energy sources from the current 60 percent to only three percent of net proceeds from the sale of the fuel to generating companies.

On the other hand, SB 3 charges only a uniform three percent national franchise tax on the income of distribution utilities.

Both measures are authored by Senate President Juan Ponce Enrile.

Currently, DUs are required to pay numerous taxes like the value-added tax, real property tax, income tax, regulatory fees, import duties and other fees. These taxes are generally passed on to the consumers.

The Philippines likewise imposes a 60-percent royalty on indigenous fuel sources, which further cemented the country’s infamous record of having the most expensive electricity in Asia, besting erstwhile holder Japan.

In a study conducted by private think-tank International Energy Consultants last year, the average retail rate of electricity in the Philippines is at 18.1 US cents (P8) per kilowatt-hour as opposed to Japan’s 17.9 US cents per kilowatt-hour.

Aside from Japan, subjected to the study were the utility companies in Thailand, Malaysia, South Korea, Taiwan, Singapore, and Indonesia. (Virgil Lopez/Sunnex)