The suspension of value-added tax (VAT) on power rates via granting of emergency powers to President Benigno Aquino 3rd is sought by an administration lawmaker in the House of Representatives.
Rep. Ben Evardone of Eastern Samar, Vice Chairman of the House Committee on Appropriations, made the pitch under his House Bill 3743.
Evardone cited the suspiciously simultaneous maintenance of power plants coinciding with the Malampaya natural gas plant shutdown which prompted the Manila Electric Co. (Meralco) to seek for a P4.15 per-kilowatt hour power rate increase—the highest power rate increase in Philippine history.
Meralco’s P4.15 per-kilowatt hour rate was approved by the Energy Regulatory Commission. Petitions, however, were filed before against the Meralco power rate hike before the Supreme Court.
The High Court eventually favored by issuing a Temporary Restraining Order on the Meralco rate increase.
Meralco then warned of rotating brownouts with a prolonged TRO, citing that they need to collect the increase because the maintenance shutdowns of the power plants also meant higher generation costs for them.
“This bill hopes to neutralize Meralco’s threat and prevent the recurrence of similar ones in the future. It seeks to avoid a no-win situation for the Filipino electricity consumers, who have been left to the mercy of energy providers the moment Epira took effect,” Evardone pointed out.
Evardone was referring to Electric Power Industry Act which allows power distribution firms such as Meralco to impose pass-on charges of generation charges to consumers.
Besides removing VAT on power rates, Evardone’s measure also gives the President the powers to: enter into a negotiated contract for the immediate construction of new government-owned and controlled power plants, under National Transmission Commission, which will serve as standby and ancillary generators/power plants for Luzon, Visayas and Mindanao; enter into a negotiated contract for the repair, rehabilitation, improvement, and maintenance of existing government-owned or controlled power plants, projects and facilities and further promote the development and utilization of renewable energy sources by granting additional incentives to power generators producing electricity through renewable energy systems.