Another pain from the TRAIN
Here is another bad news for all those who use electricity. Private power firm Manila Electric Co. has forecasted an increase in the price of electricity by 8 centavos per kilowatt-hour by next month.
At first glance it seems that the 8 centavos increase is just a minute hike. However, we are talking of per kilowatt-hour of usage. The longer we use electricity means the continuous imposition of the said rate increase.
With the Tax Reform for Acceleration and Inclusion (TRAIN) law, coal is now imposed with tax aside from the excise tax it is charged. Many of power generators in the country use coal as fuel for their turbine that will run to produce electric power. While many generators now do tap renewable sources, many are still using coal due to reliability reasons.
While coal in a nonrenewable source of fuel for power generation, it is still the most reliable since as long as we have the supply for coal, we can have stable supply of electricity.
Coal is also an issue to environmentalist since it generates heat and pollution due to the remnants that are made into pollutants after coal is burned. It also contributes to global warming. However, due to its reliability in power generation, the use of it is allowed in most countries.
With the increase in the tax for coal, the price of electricity is expected to increase. It shall be made a pass-on charge to power generators and to electric power distributors such as electric cooperatives. As a result, electric firms shall likewise pass-on the new tax charges to consumers as end-users and as those who will suffer the tax imposition.
In addition to the new tax charges imposed on coal, the National Grid Corporation of the Philippines (NGCP) collects from power utilities like Meralco wheeling charges. The said charges cover services for the transmission of electricity from power plants to distribution facilities.
Further, Republic 10963 or the TRAIN law repeals laws or provisions of laws that provide Value-Added Tax (VAT) exemptions. These includes some VAT exemptions enjoyed by electric power firms who are now to be imposed with VAT.
The increase in the rate of electricity shall definitely result into a domino effect just like the increase in the price of fuel where the latter affects the transport industry in the country and eventually affect the riding public and the price of commodities.
The TRAIN may result into additional infrastructures and services by the government. However, it is an additional pain in the pockets of Juan Dela Cruz. We may have to hope that the taxes we pay to the government are worth enough so we can have improved social living conditions that may result from the improved services of the government. ***
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