ES­TI­MAT­ING ELEC­TRIC­ITY PRICE HIKES RE­SULT­ING FROM TRAIN

TRAIN 1 made a big mis­take of rais­ing the cost of en­ergy in the coun­try.

Business World - - OPINION - BIENVENIDO S. OPLAS, JR.

Elec­tric­ity and en­ergy means de­vel­op­ment. So an in­creased elec­tric­ity sup­ply at a lower, more sta­ble, and more com­pet­i­tive price re­sults in in­creased de­vel­op­ment.

In­creased de­vel­op­ment means more busi­nesses and job cre­ation and less un­em­ploy­ment and poverty.

As a re­sult, it is anti-de­vel­op­ment to im­pose new or higher taxes that will make elec­tric­ity prices more ex­pen­sive.

The new tax law called Tax Re­form for Ac­cel­er­a­tion and Inclusiveness ( TRAIN) did just that.

It im­posed new taxes or raised ex­ist­ing taxes on oil prod­ucts, coal, and elec­tric­ity trans­mis­sion. But TRAIN played fa­voritism by ex­empt­ing from tax hikes nat­u­ral gas and in­ter­mit­tent en­ergy like wind and so­lar.

The Philip­pines in­fla­tion rate jumped to 4% in Jan­uary 2018 from 3.3% in Novem­ber-De­cem­ber 2017. Other Asian coun­tries ex­pe­ri­enced flat or lower in­fla­tion last month. Why?

The most prox­i­mate ex­pla­na­tion is the TRAIN law, even if var­i­ous pass-through costs have yet to take ef­fect. For in­stance, the hikes in coal tax, bunker fuel tax and VAT on trans­mis­sion charge will be felt start­ing Fe­bru­ary billing. The ex­pected in­fla­tion­ary pres­sure es­pe­cially for oil price hikes con­trib­uted to this sit­u­a­tion.

The table be­low is an at­tempt at quan­ti­fy­ing the pro­jected elec­tric­ity price hikes be­cause of TRAIN.

These es­ti­mates are made on cer­tain as­sump­tions that are based on avail­able data. Changes in as­sump­tions and more com­pre­hen­sive, na­tional data will change the re­sults, up­ward or down­ward but the num­bers will not be sig­nif­i­cant.

Based on these es­ti­mates, pay­ing an ex­tra 14 cen­tavos/kWh this year, 21 cen­tavos/kWh in 2019, and 27 cen­tavos/kWh in 2020 might ap­pear small for those con­sum­ing only 200 kWh/month. This con­sump­tion level im­plies that a house­hold doesn’t have any air­con but main­tains a small re­frig­er­a­tor and a few elec­tric lights may have to pay an ex­tra P28/month, P42/ month and P54/ month in 2018, 2019, and 2020, re­spec­tively.

But that is only for di­rect house­hold elec­tric­ity con­sump­tion. Peo­ple who live in those small houses may work and/or pur­chase ser­vices in fac­to­ries, schools, and uni­ver­si­ties, shops and malls, ho­tels and restau­rants, hos­pi­tals and air­ports, etc.

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