By Myrna M. Velasco – February 6, 2018, 10:00 PM
from Manila Bulletin
The curse of cost impact from the Tax Reform for Acceleration and Inclusion Act (TRAIN) of the Duterte administration will extend into the consumers’ electric bills this February, as power rates are anticipated to go up by more than P0.90 or close to P1.00 per kiloWatt hour.
This early, power utility giant Manila Electric Company (Meralco) has hinted to media that the rate hike “will be similar to what was also experienced February last year when we had a P0.92 per kWh adjustment in the overall rate.”
Part of the electricity rate increase in this month’s billing cycle will be the P0.07 per kWh cost impact from the reinstatement of value added tax (VAT) in the transmission wheeling charge of National Grid Corporation of the Philippines (NGCP) as provided under the TRAIN Act.
When asked on the matter, Meralco Vice President Lawrence S. Fernandez noted that they are still finalizing calculation, “but we expect significant generation charge increase.”
He explained “aside from normalization of capacity fees after outage allowance reconciliation, foreign exchange depreciated sharply from P49.93 to P51.30 to the US dollar.”
The Meralco executive similarly emphasized that there had been “upward repricing also of natural gas from the Malampaya field.”
Meralco is expected to announce the final calculated rate hike adjustments for February billing within this week.
Around March and April, it has also been indicated previously that the cost impact on TRAIN taxes on fuel (for coal and diesel fired plants) will start kicking in at consumers’ electric bills.
Several cost components of the country’s power rates have been hit by tax impositions under the TRAIN Law, that this early, investors have already been warning of its effect on cost of doing business in the Philippines.
Aside from high power rates that consumers would likely suffer from, power supply situation in the country is also wobbly because of the lingering leadership void at the Energy Regulatory Commission.
Despite the series of appeals lodged to Malacañang, appointments for acting ERC Commissioners have yet to be heeded – if only to bring the Commission back to normalcy.
There are critical matters that the regulatory body would need to act on, including the certificates of compliance or permits to operate, so power supply could be assured especially during the peak demand months of summer.