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WITH the
staggering costs of oil reaching $135 a barrel, the
Senate and the House of Representatives are now looking
for ways to reduce power rates: by amending the Electric
Power Industry Reform Act (Epira), passing the renewable
energy bill, suspending the value-added tax on oil, and
removing or reducting the taxes on indigenous natural
gas.
The
Senate minority bloc is firming up proposals to amend
certain provisions in the Epira aimed at bringing down
consumers’ electric bills.
“The
opposition senators will present a set of amendments to
the Epira when floor deliberations resume in next week’s
session,” Senate Minority Leader Aquilino Pimentel Jr.
told reporters on Thursday.
“Once
our amendments are ready, we will go into caucus with
the majority bloc, so we will identify what amendments
they can and cannot accept, and we’ll just debate it on
the floor to [hasten] proceedings.”
Pimentel
added the senators are also looking to repeal a
provision in the Ramos-era Antipilferage Act that allows
power firms to pass on systems losses to their
consumers.
“We’re
trying to look for a way to repeal that,” he said.
Pimentel
also disclosed that opposition senators would insist
that expiring onerous contracts with independent power
producers (IPPs) signed during the Ramos administration
“should no longer be renewed or extended.”
This
developed as Sen. Edgardo Angara prodded senators and
congressmen to immediately pass two bills that will
lower the cost of electricity in the country—the
renewable energy bill and the Epira amendments.
“One of
the main reasons of the high cost of electricity is our
heavy dependence on oil and coal for electricity.
Together, they are used to generate almost half [49
percent] of the total electricity generated in the
country,” Angara said.
“For
instance, electricity in
Luzon is more expensive than in Visayas and
Mindanao
because of its heavy dependence on coal. Generation
charge in the
Mindanao grid, which relies on hydropower for 60 percent of its
electricity needs, is lower by P1.6359 per kilowatt-hour
than in
Luzon’s.
In a
statement, Angara noted that both oil and coal have
reached record highs this year, with oil reaching $135 a
barrel last week and coal at $116 a ton in February.
“Because
we import most of our oil and coal needs [99 percent for
oil and 80 percent for coal], the Philippines is very
vulnerable to oil- and coal-price hikes in the global
market, especially now that both global prices of oil
and coal are at record highs,” he said.
According to Angara, the logical solution would be to
switch to renewable sources of energy as the Philippines
has a huge, but largely untapped potential.
“Our
potential for wind power alone can meet our current
demand of 10,000 megawatts seven times over,” he said.
“That’s why we’ve got to encourage companies and
households alike to invest in renewable energy. The
renewable energy bill offers benefits and incentives to
entities and stakeholders engaged in its manufacture,
distribution and use.”
He
explained that the bill provides an investment
environment conducive for developers of renewable-energy
technologies. Angara added that government requirements
for open access should be relaxed, so that the Energy
Regulatory Commission may declare open access sooner.
Open
access could lower the distribution charge, transmission
charge and generation rate, and will result in lower
electricity rate.
At the
same time, since the government finally accepted that it
would not meet its balanced budget target this year,
Sen. Mar Roxas II recommended that Malacańang give the
green light to its allies in Congress to suspend the
12-percent VAT on oil products.
When the
proposal to impose a 12 percent VAT on oil was still
being deliberated upon, Roxas recalled that
Dubai crude was still pegged at $34 a barrel. Now, he added,
the price of
Dubai crude has reached $130 a barrel.
This
means that if the government earlier expected to collect
around $4 of VAT a barrel of crude, it now collects more
than $14 a barrel, or excess revenue of around $10 per
barrel.
“The
government has collected so much, more than what it
originally expected. So why is it refusing to give back
to the consumers?” he asked.
If the
government really wants to help the consumers and
protect the “real economy” at this time of crisis, Roxas
recommended that it must immediately push moves to
suspend or remove VAT on oil.
Meanwhile, in a public hearing of the Committee on
Energy at the House of Representatives yesterday,
Richard Tantoco, First Gas executive vice president and
chief operating officer, said the consumers are paying
more than P2 per kilowatt-hour (kWh) in royalties and
taxes on electricity produced from power plants using
indigenous natural gas from Camago-Malampaya.
“The
royalty tax per kilowatt-hour of natural gas plants
today is about P1.79/kWh…There is the Evat [expanded
value-added tax] of 12-percent, which adds another
P0.21/kWh bringing the total to over P2/kwh,” Tantoco
said.
First
Gas said that with oil hovering at $130 a barrel,
removing the taxes would help spur the search and
development of indigenous fuels, such as natural gas.
He said
Indonesia, Malaysia and Thailand have hardly any royalty
on tax on domestic sources of fuel sold in their
respective countries.
“The
government, in effect, through our distorted tax
policies, is encouraging the use of foreign fuels rather
than helping in developing our domestic sources of
fuel,” he added. |
