Meralco told to explain TRAIN rate hike

Power utility giant Manila Electric Company (Meralco) is being demanded to provide an all-inclusive explanation on its calculated R0.08 per kilowatt hour (kWh) rate hike attributable to tax rates prescribed under the Tax Reform for Acceleration and Inclusion (TRAIN) Act.

Meralco has indicated to media that such will be in view of the combined cost impact of the re-imposition of value added tax (VAT) on the wheeling charge of the National Grid Corporation of the Philippines (NGCP) and the higher excise taxes on coal as fuel for electricity generation.

Energy Secretary Alfonso G. Cusi told reporters that he sent a formal correspondence to Meralco to let them flesh out the premise of their rate hike calculations.

“Meralco – they’re saying the increase is R0.08 per kWh (for transmission and coal tax), now you ask me, how much will it cost? I cannot just say, it’s R0.08 per kWh, it is wrong to assume,” he said.

Cusi noted this is the reason why he wants to get to the bottom of the utility firm’s cost impact estimates, thus, he is seeking formal explanation from them.

“So what I did, I asked Meralco how did you arrive at the R0.08 per kWh, that’s what we have been talking about so far,” he averred.

And within the Department of Energy (DOE), the energy chief noted that he similarly gave out instructions to his team to have the media-published calculation of Meralco be carefully examined and re-validated.

“That’s what is being done by (Undersecretary Jesus Cristino) Posadas, to scrutinize it, because I will not just accept it,” Cusi stressed.

He further explained that the role of the energy department is to protect the consumers, adding that “we set the policy, we make sure that everybody will follow the policy and it is implemented to the letter.”

Even on cost assumptions being floated on the impact of fuel price hikes on the Small Power Utilities Group (SPUG) of the National Power Corporation, Cusi noted that he wants that thoroughly studied.

“I will not just accept it and tell it to you that this is the cost impact – this is why I need help. I want to know what is the generation cost in the SPUG areas and what is being charged to the public,” he said.

On energy cost hikes from TRAIN taxes, Cusi noted that he wants that calculated extensively as well so consumers will not just be unduly charged – either in the subsidy component of the SPUG rates or on the direct cost being passed on in the electric bills relative to the use of fuel for power generation.”