DECRYING the incomparable costs of living against the increase in cost of basic commodities and utilities, militant group Bagong Alyansang Makabayan (Bayan) urged Thursday the scrapping of “unjust charges” to reduce power rates.

                In a statement, Bayan recommended that the value-added tax (VAT) on generation, transmission and distribution, and the separate system-loss charge be removed from the electric bill of all power consu-mers nationwide.

                The militant group described these charges as “an unfair burden on consumers.”

                Bayan said removing the system- losses charge and the VAT on power will result in a rate reduction of P1.42 per kilowatt-hour (kWh) for Manila Electric Co. (Meralco) customers, and that other electricity consumers nationwide are expected to receive significant rate reductions as well.   

                Bayan and People Opposed to Warrantless Electricity Rates (Power) demanded the government to stop collecting the VAT on system  losses, lifeline subsidies and franchise taxes and for previous collections to be refunded to consumers.

                Bayan and Power said  these charges are “patently unjust and outrageous from the onset,” and that there is already an emerging consensus between the power industry, administration and opposition lawmakers and consumer groups that the VAT should not be applied to system losses and lifeline subsidies.

                Systems losses should not be VAT-able because, by its nature, system  losses are electricity lost for various reasons.

                Lifeline subsidy rates, on the other hand, are paid for by consumers subsidizing other consumers and are considered revenue neutral. Franchise taxes, on the other hand, are revenues going to the government and should not be taxed again with the VAT.

                “Even if the VAT on power is not yet repealed, the national government can already move to lower rates by removing the VAT on system  losses, lifeline subsidies and franchise taxes, and by refunding the VAT on these items collected since 2006,” Renato Reyes Jr., Bayan secretary-general, said.

                Power has estimated that the VAT on system losses alone, an item that represents technical losses and pilfered electricity, will reach more than P3.4 billion since 2006.

                “The Bureau of Internal Revenue and the Department of Finance can already make adjustments that will benefit consumers. Our only problem now is Malacañang, which is adamantly against the removal of the VAT on power,” Reyes added.

                As for the state-owned National Power Corp. (Napocor), the protes-ters are demanding an immediate refund of Napocor’s overrecoveries from 2006 up to the present, which the Energy Regulatory Commission  (ERC) estimates is at P10 billion.

                Bayan and Power also suggested the rejection of the P14 billion Napocor-Meralco settlement, which aims to pass on bad debts to consumers.

                The two groups also encourage the rejection of the Napocor-Power Sector Assets and Liabilities Management Corp.  petition that allows the recovery of P9 billion in generation charges that resulted from Napocor’s “market power abuse” in the Wholesale Electricty Spot Market from August to November 2006. This petition is currently pending before the ERC.

                Bayan said stricter regulation and monitoring of Napocor fuel procurements to prevent overpriced emergency coal purchases, which raise generation rates, should be in place.

                Bayan emphasized the need to review all independent power producer contracts of Napocor and other distribution utilities and disallowing take-or-pay provisions that are usually disadvantageous to consumers.

                “There is also a need to scrap the Electric Power Industry Reform Act   and an immediate stop to the deregulation and privatization of the power sector in favor of a more regulated environment where rates can be thoroughly scrutinized,” Bayan said.

ENVIRONMENT Secretary Lito Atienza has advised Oceana Gold Philippines Inc. to proceed with the construction of its Didipio mine in Kasibu, Aklan, saying the company is operating within the bounds of the law.

Infrastructure projects undertaken by the government are prone to posting cost overruns, according to the National Economic and Development Authority (Neda).

CITY OF SAN FERNANDO—A temporary restraining order (TRO) was issued by the Regional Trial Court here on Tuesday regarding the implementation of Pampanga’s  Ordinance 176, otherwise known as “An Ordinance Provi-ding for the Equitable Distribution of Shares of Fees/Taxes Imposed by the Province of Pampanga for the Extraction of Quarry Materials and for Other Purposes.”

PROJECTS with cost overruns will no longer be processed by the National Economic and Development Authorioty (Neda) without a budget strategy coming from the Department of Budget and Management (DBM).

A THREE-DAY conference on wastes among local officials and their representatives ended Thursday with green groups pushing for the application of innovative solutions to the garbage problem to help reverse global warming and climate change.

THE Cebu Business Month (CBM)  activity of the Cebu Chamber of Commerce and Industry (CCCI) next month will hold the first Philippine Open Source Summit at the Cebu International Convention Center.

THE Department of Agriculture (DA) signed an agreement with two farm-based nongovernment groups to allow them to recommend industry representatives to join the department in its ocular inspections of shipments of imported farm products at the Bureau of Customs (BOC).

LOCAL seaweed producers has projected that the volume of carrageenan exports for this year may go down by 50 percent to 80,000 metric tons (MT), from 160,000 MT, as production of seaweed slows due to poor harvests and increasing cost of manufacturing carrageenan.

DECRYING the incomparable costs of living against the increase in cost of basic commodities and utilities, militant group Bagong Alyansang Makabayan (Bayan) urged Thursday the scrapping of “unjust charges” to reduce power rates.