Senator Risa Hontiveros on Friday urged the government to aggressively provide more measures to further cut electricity costs to ease the burden of Filipinos facing economic uncertainty due to the novel coronavirus (COVID-19) pandemic.
“The government should take urgent action and come up with all possible forms of financial relief to ensure the economic survival of Filipino families and businesses,” she said.
During the Joint Congressional Energy Commission hearing on the effects of the COVID-19 on the power sector, Hontiveros urged Energy Regulatory Commission (ERC) and other members of the sector such as the Department of Energy (DOE) to immediately exercise their regulatory powers pursuant to their mandate of ensuring power rates are reasonable and affordable, especially in this extraordinary time. “The Filipino people has always been carrying the burden of high electricity rates na lalo pang pinabigat ng krisis. Stakeholders should sacrifice short term profitability to help unload the public of this baggage,” she added.
Hontiveros proposed the cancellation of VAT charges on electricity bills to complement the deferred and staggered payment options imposed by ERC on distribution utilities such as Meralco. This will hasten the financial difficulty of consumers who lost their income source during the quarantine period.
“At the end of the day, consumers still need to foot the bill in its full amount. Paano kung walang pagkukunan dahil nawalan ng trabaho?” she said. “Dapat tulungang mabawasan man lang ang kailangan nilang bayaran.”
Assuming that the applied VAT rate is 10%, a household with an average monthly consumption of 100 kilowatt per hour (KWH) can save at least P100, once VAT is waived. “Every peso counts in this pandemic. Savings from uncharged VAT will provide an indirect support to consumers, pandagdag sa pambili ng pagkain o sa iba pang bayarin.” she added.
Aside from cancelling VAT charges, Hontiveros explained that ERC should urgently suspend controversial rate collections such as the Weighted Average Cost of Capital (WACC) under the transmission charge of the National Grid Corporation of the Philippines (NGCP) which is almost twice the global average.
“The rate of 15% is under review and while it is pending evaluation, ERC can temporarily peg it at global standard of 8%,” she said. “Review of power rate increase applications should also be extra rigorous and carefully evaluated.”
Likewise, the Senator urged DOE to further explore its Competitive Selection Process (CSP) policy guideline for power supply contracts which according to Energy Secretary Alfonso Cusi’s report in last year’s budget hearing, has lowered power rates among distribution utilities.
“The measure was able to reduce at least P2.00 per kilowatt-per-hour in covered areas under Meralco franchise. This is a substantial amount that can reduce the monthly electricity bills of consumers,” she said.
Hontiveros said that despite privatization, the power sector is still imbued with public interest and remains a legitimate interest of the State especially during this time of crisis.
“We are now living in an extraordinary time. Shared responsibility and accountability are expected from the energy sector, not just to tide us over this economic catastrophe, but to help us adapt to the “new normal” moving forward,” she concluded.