Consumer group pushes termination of cross subsidy of lifeline rates

MANILA, Philippines — A consumer group is urging for the termination of the cross subsidy provision in  the bill pushing for the extension of lifeline rates, which provides subsidized electricity rates to end users consuming 100 kilowatt hours(kwh) and below.

In a statement, Laban Konsyumer Inc.(LKI) said it supports Senate Bill 1583, which extends the term of the lifeline rates as mandated in Sections 43 (J) and 73 of Republic Act 9136 or the Electric Power Industry Reform Act(EPIRA) Law, except for the provision on cross subsidy.

“We submit that the committee also consider to repeal and terminate the cross subsidy authorized under Section 74 of the EPIRA,”the group said.

Under section 74 of the EPIRA Law, the Energy Regulatory Commission(ERC) may extend the period for the removal of cross subsidies for a maximum period of one year upon finding that cessation of such mechanism would have a material adverse effect upon the public interest, particularly the residential end user, or would have an immediate, irreparable and adverse financial effect on distribution utility.

The lifeline rate provides assistance to low-income electricity consumers which are done through discount rates based on the scale of their monthly usage.

The group emphasized that at present, non-lifeline consumers subsidize P0.0604 per kwh as lifeline subsidy in the bill.

“After 20 years from the EPIRA, there should be no more authorized cross subsidy,”LKI said.

Senate Bill 1583 is seeking for the extension of lifeline rates for another 20 years or until 2041.This is the second extension of the lifeline rate which was first extended for 10 years and is set to expire in 2021.

LKI said the removal of the lifeline subsidy would result in savings for electricity users consuming 200 kwh and above.

The group said those consuming 200 kwh would have savings of P12.08, P18.12 savings for 300 kwh, P24.16 for 400 kwh and P30.20 for 500 kwh.

Meanwhile, LKI also commented on Senate Bill 1188 or LPG Act, which pushes for the safe use of liquified petroleum gas(LPG).

LKI is proposing a cooling off period for public officials of the implementing agencies who retire, resign or quit the public office for a period of one year before joining employment in the LPG industry.

It added that this is consistent with Section 7 of Republic Act 6713 on Prohibited Acts and Transactions of the Code of Ethics of Public Officials.

The LPG Act will eliminate the circulation of generic LPG cylinders which have no markings, labels, tare weight and are unsafe for household use.