A NETWORK of power consumers, civil- society organizations and advocacy groups engaged in issues of energy and electricity on Wednesday slammed the proposal of the Philippine Rural Electric Cooperatives Association Inc. (Philreca) to add real property tax (RPT) to the monthly bill of consumers nationwide.
Philreca has filed a petition with the Energy Regulatory Commission (ERC) to initiate and promulgate rules on its proposal to pass on RPT charges to member consumers.
The petition follows the Supreme Court ruling that transformers, electric posts, transmission lines, insulators and electric meters are not exempted from RPT under the local government units (LGUs).
“Local governments should not allow electric cooperatives [ECs] to pass on RPT to their constituents, indirectly taxing the citizens for the property of ECs, which should be tax-exempt in principle in the first place,” Power for People Convenor and Center for Energy, Ecology and Development (CEED) Executive Director Gerry Arances said in a statement.
“Voters should take note,” he said, of who among the politicians “support this proposal, especially party-list groups who represent interests other than that of the consumers.”
For his part, Dr. Clint Pacana, convenor of the Mindanao Coalition of Power Consumers (MCPC), president of the Institute for Power Sector Economics and one of the founders of the Power for People Coalition, said, “In previous years, consumers have always been one with ECs to be recognized as tax-exempt just like any other cooperative, since they are supposed to be people’s enterprises owned by the consumers they serve.”
He continued: “What I do not understand is why ECs, or Philreca, would just abandon the consumers in this. While the consumers fight it out for their tax exemption, ECs want the easy way of passing on the burden to their supposed owners—the unfortunate consumers. We hope there is no collusion among local officials, ECs and other distribution utilities [DUs] for this,” he said.
Meralco refund
Last week, the ERC ordered Meralco, the biggest DU in the Philippines to refund consumers the estimated P4.41 billion left of the P10.8 billion it allegedly overcharged consumers from February 1994 to February 1998. In 2017, Meralco was also directed to refund P6.9 billion in overcharges collected over the previous three years, which included P1.08 billion in real property taxes.
“Despite the terrible underperformance of many DUs and ECs in delivering clean and affordable electricity in their franchises, Philreca shamefully has the nerve to pile on to the already overwhelming electric costs being shouldered by consumers,” Arances pointed out.
“Already, electric consumers are bearing the brunt of many ECs’ violation of system loss caps, mismanagement of financial liabilities, and the costly power supply agreements [PSAs] with dirty energy generation companies,” said Arances.
The group said many ECs are guilty of long and frequent interruptions in their respective franchises and failure to electrify areas within them.
The underperformance of ECs is now the subject of investigation in the Senate, as it reviews the financial and technical performance of the ECs to determine which franchises should be revoked.
“It eludes me why electricity in our province is so expensive,” said Msgr. Meliton Oso, director of the Catholic Bishops’ Conference of the Philippines National Secretariat for Social Action, Iloilo Social Action Center.
“On top of the P8 our office has paid for generation last month, other charges have increased the rate we pay to more than P11 per kWh. Imagine now how ordinary Filipinos have to deal with this abusively high cost of electricity on a monthly basis,” Oso added.
Currently Iloilo has the most ex-pensive generation cost of electricity in the Visayas and in the country at P6.82/kwh, bought by Iloilo I Electric Cooperative from the Panay Energy Development Company through an Electric Power Purchase Agreement. This rate from coal-based energy is significantly higher than the P2.99 kWh rate boasted by wind and solar energy GenCos.
“We want electric cooperatives to practice integrity in their line of business, and not knowingly engage in contracts and dealings which will inevitably burden the people,” Oso continued. “It is quite appalling that Filipinos much poorer than them should foot the bill for their lawful duty of paying taxes,” he said.