Power rates seen to go down P1/kilowatthour with Enrile measures

MANILA, Philippines - Electricity rates are likely to go down by P1 per kilowatthour (kwh) once the twin power reduction bills authored by Sen. Juan Ponce Enrile are passed, the lawmaker said yesterday.

“The enactment of these proposed measures will result to lowering of electricity cost to at least P1per kwh across the board, nationwide. This is definitely big, big savings to families,” Enrile said.

Household customers at the Manila Electric Co.’s franchise area alone will enjoy a 23-centavo per kwh reduction in their electric bills if these new laws are legislated.

Official documents showed that for business establishments, electricity rates would go down by five to 12 centavos per kwh.

If approved and passed by lawmakers, this power reduction measure will counter any impending power rate hike like that of the National Power Corp. (Napocor).

 Napocor filed an application with the Energy Regulatory Commission to bring up power rates by an average of 17.20 centavos per kwh in Luzon and more than P2 in the Visayas.

Enrile said he is pushing for these twin bills, Senate Bill (SB) 3147 or the Uniform Franchise Tax Act and SB 3148 or the Electricity Rate Reduction Act, as these will give immediate relief to consumers.

“Lower electricity bills will put more money in the hands of consumers, who will in turn use that money to consume more goods and services. So, you will create demand. You will create jobs. You will create industries,” Enrile said.

The proposed measures hold that the country’s high electricity rates, to a large part, is traceable to layers of taxes being charged to both power generation and distribution utilities firms, which is mostly passed on to electricity consumers.

Thus, SB 3147 proposes that government adopts a franchise tax regime where electric utilities are levied three-percent tax on their gross distribution income in lieu of all national and local taxes.

Currently, distribution utilities have to pay for local franchise tax imposed by local government units, value-added tax and corporate income tax which are, in the end, passed on to the consumers.

SB 3148 proposes that government share or royalties collected in the exploration, development and production of indigenous energy sources shall be reduced to three percent of net proceeds levied on generation companies. The tax savings will, in turn, be redirected to lower electricity rates to Filipino consumers in a significant and sustainable manner.