Lotilla cites need to cushion impact of power rate hike
Monday, April 25, 2005
Following the decision of the Energy Regulatory Commission (ERC) to adjust electricity rates effective Tuesday, April 26, Energy Secretary Raphael Lotilla said yesterday there is a need to mitigate the impact of the new rates on consumers, particularly the poor.
"Poor households will continue to enjoy lifeline rates or discounts based on their monthly electricity consumption," Lotilla said. In Meralco franchise areas, households who consume 50 kilowatt hours or below enjoy 50 percent discount, while those who consume 51-70 kwh and 71-100 kwh get 35 percent and 20 percent discounts, respectively.
President Arroyo earlier instructed the Department of Energy (DoE) to assist the ERC in its review of the lifeline rate structure to enhance the protection extended to poor consumers.
"While our current lifeline rate has been hailed internationally as the best designed in the world, ERC’s decision to review the existing scheme in order to strengthen it is a welcome move," Lotilla added.
The energy secretary cited the opportunity for consumers to maximize their electricity savings under the Time-of-Use (TOU) pricing. The adoption of the TOU pricing approximates the true cost of electricity at different times of the day.
Lotilla explained that the TOU, when fully implemented on the retail level, will allow consumers the option to use electricity during off-peak hours when electricity is less costly. Based on the ERC decision on mandatory TOU pricing, electricity rates are cheaper between 10 p.m. and 7 a.m. from Monday to Saturday.
Lotilla also directed all powerrelated corporations of the government to exert efforts to bring down the cost of electricity. He directed the National Power Corp., the National Electrification Administration, and electric cooperatives to vigorously reduce systems losses and pursue efficiency improvement programs.
He said that every 1 percent reduction in systems loss in the next five years will result in savings amounting to about P400 million a year.
The energy chief stressed that electricity is no longer cheap. "I am calling on the public to fully support our energy conservation program," Lotilla said.
The government is pursuing an efficiency and conservation program, starting with its implementation of the four-day workweek to cut costs for electricity, oil, water and other utilities. The private sector has also committed to embark on reducing wasteful energy consumption. Households are also encouraged to reexamine their consumption habits to reduce costs.
Meanwhile, Cyril del Callar, president of the National Power Corp. (Napocor), said consumers could save on electricity cost if they avail themselves of the TOU program.
"We are urging households to avail of this program because this will really reduce their monthly electricity bills," del Callar said.
In its decision, the ERC gave the Manila Electric Company three months to file its proposal for a TOU rate schedule for its residential customers. Other private utilities were directed to file their end-user TOU scheme with the ERC within the next six months.
For electric cooperatives, the timetable for filing is as follows: in Luzon, within the next 12 months; in the Visayas, within the next 15 months; and in Mindanao, within the next 18 months.
Napocor vowed to continue pursuing stringent cost-cutting measures, in particular those designed to reduce fuel costs, which will then bring down Napocor’s rates. These include maximizing the use of power plants that run on less expensive fuel (e.g., hydro, coal, and geothermal) and improving the operational efficiency of Napocor’s generation facilities. These twin measures alone yielded savings of P3.9 billion for Napocor in 2004.
Meanwhile, House leaders yesterday threw their support for President Arroyo in her call to Asian and African leaders to push for greater stability of oil prices in the world market.
Rep. Eduardo Gullas (NP, Cebu), the President’s call was not only timely but also of paramount importance at this time when the national government is pursuing talks with oil-rich countries to help the country secure more beneficial arrangements that will ensure the supply of oil at a cheaper cost.
Rep. Antonio V. Cuenco (Lakas, Cebu City) praised Mrs. Arroyo for her initiative and her statesmanship.
He said the Philippines is fortunate to have a leader who fully understands not only the fundamentals of economics but also of geo-politics.
Put safety nets, legislators told
By GENALYN D. KABILING
Malacañang yesterday reminded lawmakers to place adequate safety nets, including a "no pass-on provision" to consumers when they set the value added tax (VAT) at 12 percent in goods and services.
Press Secretary Ignacio Bunye issued the reminder to Congress leaders who are engaged in protracted debates over the Palace-endorsed VAT bill in the wake of the impending increase in electricity rates.
Bunye said safety measures should be drawn up to protect Filipinos from carrying the burden of the additional taxes on goods, including oil and power, both of which have already high cost.
"We are hopeful that in the end, when the final version comes out there will be safety measures to protect Filipinos especially the poor," he said.
"Basic commodities should not be affected by any increase in the rate," he said.
He also urged the bicameral conference committee to incorporate a provision that would ensure that a higher VAT rate on services, most especially power, is not passed on to end-users.
"The no pass-on provision is one of the safety nets they should consider," he said.
Bunye denied reports that the President initially wanted to allow independent power producers to pass its higher VAT tax to their consumers for fear they would pull out their investments in the country.
"The President has repeatedly said the poor should be given ample protection. We know that any adjustment in power rates has an effect especially on small consumers," he said.
posted by philpower @ 1:00 PM,
