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Solutions for the growing energy sector

Meralco’s price per kWh decreased by 12 centavos, equivalent to P24 less in the bill of a typical household consuming 200 kWh

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At the 2022 national and local elections in the country, the world witnessed democracy in full display. The Commission on Election (Comelec) mounted a widely successful poll, with unprecedented voter turnout and very minimal issues encountered. Results for national posts started quickly, accurately coming in and the numbers were so glaring there is little to no room for doubt.

As of this writing, winners of senatorial posts have been proclaimed, along with most local government posts. Only the President’s and Vice President’s official proclamations remain, with the BBM-Sara UniTeam tandem as the evident victor.

Now the real challenge begins. After wooing for votes with envisioned programs and platforms, putting the plans in motion is what the new administration must now contend with.

Fortunately for the new leaders, many in the private sector are eager and willing to aid in these plans, with only public interest in mind. Take, for instance, the efforts done by power distributor Meralco, which recently announced a reduction in their rates for the month of May. Meralco’s price per kWh decreased by 12 centavos, equivalent to P24 less in the bill of a typical household consuming 200 kWh.

Driving this reduction was the refund in distribution-related charges that the Energy Regulatory Commission (ERC) directed. Collective refund implemented by Meralco now totals to almost P1/per kWh — definitely a huge relief for customers.

ERC Chair Agnes Devanadera, in a recent radio interview, explained the mechanisms in place that includes the review of rates as part of the commission’s mandate to ensure consumer protection.

She also proposed that the government look into the value-added tax (VAT) system being implemented in power rates. She flagged that consumers are paying for double VAT, with the 12 percent (VAT) being imposed on the generation charge when it should only be applied to the distribution charge.

According to Devanadera, this reduction in taxes is a low-hanging fruit that can be easily attained with the Bureau of Internal Revenue (BIR) merely issuing a legal interpretation of this policy.

No legislation is needed, but with immediate impact.

Another solution she identified that can promptly address the increasing international fuel price adjustment is to suspend the excise tax on coal and petroleum fuel products (diesel and gasoline). She further identified ways on how this can be negated – deviating the tax instead to non-essentials such as the services and goods in the gaming industry. Devanadera said this simple motion can have an immediate impact and is a welcome respite for consumers.

Aside from reducing rates, Chair Devanadera also brought forward proposals for the development of nuclear energy — a program aligned with presumptive President Bongbong Marcos’ energy plans. She is seeking the creation of an agency focused on laying down the foundation to include nuclear energy in our energy mix, and ensure the safety of the nuclear plants.

Nuclear is also a technology being explored for micro-grids, which can help in providing reliable and cost-efficient electricity supply in secluded off-grid or island areas. I have personally experienced the need for such after a recent stay in Palawan. The island is glorious and truly a tourist paradise, and it can be developed more if only the supply of electricity is steady. Power interruptions three to four times a day seemed to be the norm, even in resorts.

The inquisitive tourist in me did some queries and found out from a staff member in the hotel that they’re paying a hefty P30 per kWh for electricity service. As someone who pays around P10/kWh in Metro Manila, the price was a shock to me. My source clarified though that the P30/kWh charge already included the use of more expensive diesel to run the generator sets during outages to serve their customers.

Considering that the island is already subsidized (subsidy is via the Universal Charge Missionary Electrification and is part of the P10/kWh the main grid consumers also pay for), shelling out the amount mentioned by the hotel staff is certainly a concern. I will discuss further this experience in my next column, as well as the benefits of micro-grid and similar technologies.

As the energy industry grows further, issues surface. Thankfully, there are plenty of innovative concepts that put consumer interest at the forefront. As we position the country for growth, having proactive solutions can provide both short and long-term benefits all for the interest of consumers.

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