Power rate in­crease

In­crease in ex­cise tax on coal im­ports due to tax re­form to im­pact power rates

Sun.Star Davao - - BUSINESS - By Reuel John F. Lu­mawag

THE Min­danao Power Mon­i­tor­ing Com­mit­tee (MPMC) said an in­crease in elec­tricty rates will be ex­pected as the Tax Re­form for Ac­cel­er­a­tion and In­clu­sion (Train) Act im­poses an in­creased ex­cise tax upon im­port of coal.

Un­der the Train Law ex­cise tax on coal has been in­creased to P50 per met­ric ton (MT) for 2018. In 2019 ex­cise tax will be in­creased to P100/MT and then P150/MT by 2020.

Prior to the tax re­form ex­cise tax on coal was only at P10/MT.

How­ever, Min­danao Power De­vel­op­ment Pro­gram (MPDP) tech­ni­cal con­sul­tant engi­neer Glenn Jay Re­ston told SunS­tar Davao in a phone in­ter­view that the in­crease will only be min­i­mal as Min­danao's power dis­trib­u­tors still get a chunk of its sup­ply from the 982 MW Agus-Pu­langi Hy­dro­elec­tric Power Plants.

Re­ston said be­cause of the unique power sup­ply mix of Min­danao-based power dis­trib­u­tors wherein around one third of the elec­tric­ity re­quire­ment is com­ing from the hy­dropower plants, the power rate in­crease are be­ing cush­ioned by the gov­ern­ment owned hy­dro­elec­tric plants, which have lower gen­er­a­tion rates.

Re­ston said the in­crease per kilo­watt hour (kwh) will be less than P1, es­ti­mated around P0.02/ kwh for the first tranch.

"For a house­hold that has a monthly con­sump­tion of 200kwh will only have an in­crease of around P4 in their monthly bill," he said, adding that this is only part of their ini­tial com­pu­ta­tions.

Data from the De­part-

ment of En­ergy showed that in­stalled ca­pac­ity from grid­con­nected and em­be­ded coal­fired power plants in Min­danao as of June 2017 is at 1,070 megawatts

(MW) or 34% of the to­tal ca­pac­ity of the is­land. Min­danao has a to­tal in­stalled ca­pac­ity of 3,141 MW from grid-con­nected and em­be­ded non-re­new­able and re­new­able en­ergy plants.

Re­ston also said in or­der to fur­ther cush­ion the pos­si­ble in­crease of power rates in the fu­ture, power dis­tri­bu­tions should have a bal­anced power sup­ply mix from both re­new­able and non-re­new­able en­ergy sources.

He pointed out that while the ini­tial gen­er­a­tion of re­new­able en­ergy sources are much higher at the be­gin­ning it will be­come cheaper a cou­ple of years later once the power in­vestor has achieved its re­turn of in­vest­ments.

At present, based on the mon­i­tor­ing of MPDP, no Min­danao-based power dis­trib­u­tor has in­creased its rates due to the Train Act.

The MPDP of the Min­danao De­vel­op­ment Author­ity (Minda) serves as the tech­ni­cal sec­re­tariat of MPMC, a multi-agency com­mit­tee tasked to mon­i­tor the power sec­tor of Min­danao.


PRICE WATCH. Trade Sec­re­tary Ra­mon Lopez to­gether with DTI 11 As­sis­tant Re­gional Di­rec­tor Ed­win Ban­querigo in­spects prices of ba­sic com­modi­ties in­side a su­per­mar­ket at a lo­cal mall in Davao City yes­ter­day. Lopez said af­ter the in­spec­tion that prices in Davao are still be­low the sug­gested re­tail price.

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