Bill cutting royalties from indigenous energy OKd

MANILA, Philippines - The Senate has passed on third and final reading a bill seeking to lower royalties or the government’s share from the use of indigenous sources of energy, which would bring down the cost to consumers of electricity from such sources.

The pet bill of Senate President Juan Ponce Enrile, according to Senate Majority Leader Juan Miguel Zubiri, could bring down electricity costs by as much as 30 percent.

Enrile’s proposal was just one of the 10 bills passed by the Senate since it resumed session last Monday.

Under Senate Bill 3282, more popularly referred to as the proposed “Electricity Rate Reduction Act of 2009,” the government is mandated to reduce its share from the sale of indigenous natural resources. 

Section 4 of the measure explicitly provides that such reduction “shall be reflected and passed on to eligible consumers as a reduction in power generation charges.”

“Power generation cost constitutes the biggest component of our monthly electrical bills. The royalty taxes imposed on locally sourced natural gas, on the other hand, comprise a significant part of such power generation cost. A reduction in royalty taxes, therefore, will ultimately bring down our monthly electrical bills. This is the most significant, direct and expeditious way by which our government can show sincerity in its much-ballyhooed campaign for lower power rates. My Senate bill, in effect, challenges our government to put its money where its mouth is,” Enrile said earlier.

The Senate chief said the law was important to address the disparity between the higher royalty fees imposed on indigenous natural gas and the significantly lower taxes on imported coal and oil. 

Enrile reaffirmed the government’s commitment to ensure that SB 3282 would be enacted into law before the end of the year. 

He also pointed out that his proposed measure “will directly result in power cost reduction that will range from P1.34 to P2.00 per kWh for business or industrial users, and at least P1.00 per kWh for residential consumers.”

Enrile said the leaders and members of the House of Representatives committed to work on a counterpart bill and that other business groups had been pushing for immediate government action on the proposal.