ERC, Napocor can ease P3.6-B e-VAT blow on Meralco customers – TUCP
Tuesday, December 13, 2005
MANILA (PNA) - The Energy Regulatory Commission (ERC) and the National Power Corp. (Napocor) can and should mitigate the impact of the expanded value-added tax (EVAT) on the electricity bills of some 2.8 million households in Metro Manila and outlying areas starting this month, the Trade Union Congress of the Philippines (TUCP) said.
The stronger peso and lower oil prices should soften the EVAT’s blow on the average residential customer of Manila Electric Co. (Meralco), according to TUCP general secretary and former Sen. Ernesto Herrera.
“Oil prices now are lower than their pre-VAT levels, while the peso has since gained significantly against the dollar,” he said.
The twin factors should help ease anticipated increases in the bills of Meralco’s home customers beginning this month, Herrera said.
Citing Bangko Sentral ng Pilipinas (BSP) figures, Herrera said the peso closed at P53.42 to a dollar Friday, up four percent compared to the local currency’s P55.71 to a dollar pre-VAT monthly average in October.
Based on data from the Department of Energy (DoE), Herrera also noted that the benchmark Dubai crude is now cheaper than its pre-VAT price in October, thus the series of backs in the pump prices of petroleum products in recent weeks.
Among the factors used to compute Meralco’s billing charges are the peso-dollar rate, or the so-called currency exchange rate adjustment (CERA) charge and Napocor’s selling rate, which in turn partly depends on fuel prices.
Previous ERC simulations indicated that some 2.8 million Meralco customers consuming 200 kilowatt-hours, or about 71 percent of households serviced by the utility, are expected to spend P108.35 more for their bills this month due to the EVAT.
Meralco’s own simulations essentially validated the ERC projection, suggesting a P107.21-increase in the monthly bills of most residential customers.
Based on the simulations, Herrera said the 2.8 million residential customers of Meralco would spend a total of P300 million more for their bills this month, or a cumulative P3.6 billion over the next 12 months, without counting the two-percentage point increase in the EVAT rate to 12 percent starting January.
“This means P3.6 billion would be taken out of the pockets of 2.8 million families because of the EVAT on power alone. This is a lot on purchasing power that would be drawn off households, particularly those earning the minimum wage,” Herrera said.
He added: “This does not include the buying power taken out of the other 29 percent of Meralco’s residential customers, and the utility’s commercial and industrial clients.”
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