FDC unveils 12 ways of reducing power rates
06/17/2008 | 04:28 PM
MANILA, Philippines - Scrapping the value added tax (VAT) on oil and power, refunding overcharged fees by utility firms and eliminating corruption and mismanagement in the power industry.
These are just some of the ways of how power rates can be reduced, an anti-debt watchdog group said Tuesday.
The Freedom from Debt Coalition (FDC) said the list stemmed from its position paper outlining 10 reasons why electricity bills are high.
In a statement on its website, the group dismissed as "palliatives" the six government measures that aim to bring down rates by as much as 64 centavos per kilowatt hour (kWh).
The group was referring to government measures that range from asking the distribution utilities to absorb the VAT on systems loss starting July, to mandating local government units (LGUs) to use 30 percent of their share of the National Wealth Tax to reduce electricity rates.
"These measures only serve to highlight the government's strategy of resolving the staggering hike of consumer electricity prices in the country by passing the buck to the next guy without sacrificing anything," it said.
"The Coalition believes that while these proposals may soften the blow of electricity rate hikes, the fundamental cause of the whole price surge is the underlying government paradigm of private sector control of supply and deregulation of a highly concentrated market," the FDC added.
"Thus, the administration's palliatives which pander to such a paradigm will not keep electricity rates down. FDC consequently rejects the Arroyo administration's unsustainable, and at times unfounded, populist rhetoric, serving only to raise false hopes of future security for ever-struggling and increasingly insecure consumers," it ended.
The 12 suggestions included:
* Remove oil and power from VAT coverage.
* Refund to consumers the overcharging by distribution utilities and National Power Corp.
* Stop the operation of the Wholesale Electricity Spot Market (WESM).
* Remove royalty taxes on the use of renewable energy.
* Amend RA 7832 or the "Anti-electricity and Electric Transmission Lines/Materials Pilferage Act of 1994" by rationalizing further the allowable limits provided to PDUs, electric cooperatives and Transco to recover their systems losses from the consumers.
* Review tariff rates of NPC given its decreasing liabilities.
* Adjust tariff rates of electric cooperatives.
* Reform the Energy Regulatory Commission.
* Renegotiate IPP contracts.
* Public investment for potential renewable energy sources.
* Promote community-based power systems.
* Eliminate corruption and mismanagement in NPC, National Transmission Corporation (Transco) and utilities.
Strategically, the FDC called for a complete and substantial overhaul of the Electric Power Industry Reform Act (Epira), which it said is one of the major reasons why electricity rates remain high.
On the other hand, it said the promised competition embodied in Wholesale Electricity Spot Market (WESM) is one of form with little substance, resulting in the Philippines having one of the highest rates today.
"After seven years of implementation, Epira has brought about a transition from government monopoly to an enhanced private monopoly—worse, a hundred percent increase in power rates,"it said.
"What we are actually witnessing appears to be a new kind of competition among leading and dominant players in the power sector with Malacañang seemingly in the leading role supported by Ricky Razon in Transco, the Aboitizes in the generation sector and Winston Garcia's presence in Meralco," it added. - GMANews.TV
These are just some of the ways of how power rates can be reduced, an anti-debt watchdog group said Tuesday.
The Freedom from Debt Coalition (FDC) said the list stemmed from its position paper outlining 10 reasons why electricity bills are high.
In a statement on its website, the group dismissed as "palliatives" the six government measures that aim to bring down rates by as much as 64 centavos per kilowatt hour (kWh).
The group was referring to government measures that range from asking the distribution utilities to absorb the VAT on systems loss starting July, to mandating local government units (LGUs) to use 30 percent of their share of the National Wealth Tax to reduce electricity rates.
"These measures only serve to highlight the government's strategy of resolving the staggering hike of consumer electricity prices in the country by passing the buck to the next guy without sacrificing anything," it said.
"The Coalition believes that while these proposals may soften the blow of electricity rate hikes, the fundamental cause of the whole price surge is the underlying government paradigm of private sector control of supply and deregulation of a highly concentrated market," the FDC added.
"Thus, the administration's palliatives which pander to such a paradigm will not keep electricity rates down. FDC consequently rejects the Arroyo administration's unsustainable, and at times unfounded, populist rhetoric, serving only to raise false hopes of future security for ever-struggling and increasingly insecure consumers," it ended.
The 12 suggestions included:
* Remove oil and power from VAT coverage.
* Refund to consumers the overcharging by distribution utilities and National Power Corp.
* Stop the operation of the Wholesale Electricity Spot Market (WESM).
* Remove royalty taxes on the use of renewable energy.
* Amend RA 7832 or the "Anti-electricity and Electric Transmission Lines/Materials Pilferage Act of 1994" by rationalizing further the allowable limits provided to PDUs, electric cooperatives and Transco to recover their systems losses from the consumers.
* Review tariff rates of NPC given its decreasing liabilities.
* Adjust tariff rates of electric cooperatives.
* Reform the Energy Regulatory Commission.
* Renegotiate IPP contracts.
* Public investment for potential renewable energy sources.
* Promote community-based power systems.
* Eliminate corruption and mismanagement in NPC, National Transmission Corporation (Transco) and utilities.
Strategically, the FDC called for a complete and substantial overhaul of the Electric Power Industry Reform Act (Epira), which it said is one of the major reasons why electricity rates remain high.
On the other hand, it said the promised competition embodied in Wholesale Electricity Spot Market (WESM) is one of form with little substance, resulting in the Philippines having one of the highest rates today.
"After seven years of implementation, Epira has brought about a transition from government monopoly to an enhanced private monopoly—worse, a hundred percent increase in power rates,"it said.
"What we are actually witnessing appears to be a new kind of competition among leading and dominant players in the power sector with Malacañang seemingly in the leading role supported by Ricky Razon in Transco, the Aboitizes in the generation sector and Winston Garcia's presence in Meralco," it added. - GMANews.TV
