Civil society proposes power sector reforms
Manila Times
Around 100 representatives from civil society groups called for a bevy of reforms in the power sector, including the suspension of the expanded value-added tax (VAT) and other imposts on oil products, to bring down the cost of electric power in the country.
In a forum organized in Quezon City by the Freedom from Debt Coalition, Maitet Diokno-Pascual, the economist and former chairperson of the organization, said the power sector is highly concentrated in the hands of a few service providers, virtually creating monopolies.
She added the sector is highly inefficient and highly skewed in favor of those involved in providing services in the sector.
The government is actually earning a windfall from rising crude oil prices and the falling value of peso vs. the dollar. More than half of VAT from Meralco customers is paid by those consuming from 100 to 400 kilowatt-hours a month, said Diokno-Pascual.
However, she cautioned that providing additional subsidy to lifeline rate consumers does not ease the burden on the actual VAT payers, and does not make electricity cheaper for industry. “Subsidies are not sustainable, not even politically,” she warned.
The Electric Power Industry Reform Act has not changed the basic nature of the power industry, but has in fact led to greater concentration of power among a few players, while providing plenty of room to favor sister companies and industrial partners.
Participants also called for a stop to the wholesale electricity spot market that they feel have even added to power costs, since it is based on the power players’ purchase bidding during peak hours. In its stead, they called for an independent Energy Regulatory Commission to regulate the market, and for a review of rates being demanded by the National Power Corp. and electric cooperatives.
Power utilities should not be allowed to pass on systems losses to consumers caused from mismanagement and failures to plug losses.
Power costs could also be brought down by the removal of royalties on renewable energy to encourage investments in this area.
Diokno-Pascual also called for the creation of community-based power systems to stop monopoly control of the country’s power delivery system by big power producers, and to localize any potential problem that can arise in the sector.
Luis Manuel Corral, a cooperative development specialist, said the government should immediately conduct a technical audit of all independent power producers to determine if they are really providing genuine services to the public based on their respective contracts.
Dr. Roger Birosel, a geneticist with the Alliance for Consumer Empowerment, said that the government should stop its policy of interim open access in the Luzon and Visayas grids, since this allow big power layers to kill small players like electric cooperatives.
– Nora O. Gamolo
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