Every month, the family of Jocelyn Penserga pays a monthly electric bill that ranges from P2,300 to P2,500.
Jocelyn, a manager of a massage center, is married to Mark and together, they have four children. The family lives in a two-bedroom apartment in Barangay Kamputhaw in Cebu City and owns a refrigerator, two electric fans and a television set.
With the implementation of the Tax Reform for Acceleration and Inclusion (Train) Law, which slapped a higher excise tax on coal which is used by power plants in generating electricity, at least P4 to P8 will be added on top of the Penserga family’s monthly electric bill.
The increase can be seen starting with the February 2018 electric bill.
In a statement, the Visayan Electric Company (Veco) said the Train law “may affect generation rates and increase electricity rates by 2 to 4 centavos per kilowatt hour starting February.”
This means that an average residential customer with a monthly electric consumption of 200 kilowatts per hour (kWh), or paying a monthly bill of P2,272 (based on the December 2017 rate of P11.36 kWh) will have to pay an additional P4 to P8 following the implementation of the Train Law.
Tax on coal
Under the Train Law, the excise tax on coal was raised to P50 per metric ton from P10 in the first year of implementation (2018). It will increase further to P100 in the second year and P150 in the third year.
Since Veco sources some of its power from coal-fired power plants, they have no choice but to implement the increase in energy cost.
“Veco sources 40 percent of the power it distributes to its customers from coal sources. Thus, the added tax that is implemented on coal under the TRAIN Law may result to a 2- to 4-centavo increase in generation rates based on existing suppliers and current Wholesale Electricity Spot Market (WESM) prices,” the company said in a statement furnished to Cebu Daily News on Friday.
Veco emphasized that the increase in electricity cost is only for the generation rate, which will go to power generation companies.
The Veco electric bill specifies the specific charges for generation and transmission, distribution, government and others (subsidy on lifeline charge and senior citizen subsidy charge).
Veco is the second largest electric utility in the Philippines, next to the Manila Electric Company (Meralco).
Veco serves the cities of Cebu, Mandaue, Talisay, Naga and four municipalities of the greater part of Metro Cebu, namely, Liloan, Consolacion, Minglanilla and San Fernando.
Under the Electric Power Industry Reform Act (EPIRA) of 2001, the Philippines’ power sector was restructured and disaggregated into generation, transmission and distribution.
The generation side involves companies operating coal-fired power plants such as the KEPCO SPC Power Corp. (KSPC) in the City of Naga in southern Cebu. KSPC operates two coal-fired power generating units with a capacity of 100 MW per unit.
Cebu Energy Development Corp. (CEDC) owns and operates a 246-MW clean coal-fired power plant in Toledo City in southwestern Cebu. CEDC is a partnership between Global Business Power and Abovant Holdings, Inc., a joint venture of the Aboitiz Power Corporation and the Vivant Energy Corporation.
Renewable energy are also sources of power or electricity.
AP Renewables, Inc. (APRI), a wholly-owned subsidiary of AboitizPower, has expanded its renewable energy footprint nationwide with geothermal, large hydro, run-of-river hydro, solar and biomass power plants.
In the statement, Veco, which is owned and managed by the Aboitiz Power Corporation and Vivant Corporation, said their power sources do not just come from a coal-fired power plants.
“The company has a balanced power mix portfolio. A total of 50 percent of the power it distributes comes from renewable sources, 40 percent from coal and the remaining 10 percent from other sources such as oil,” the statement reads.
Veco Reputation Enhancement Manager Quennie Bronce reiterated the need for everyone to be conscious about their usage of electricity.
“Unplug those appliances or devices that are not being used, turn off lights that are not in use to save on electricity … these are our simple reminders to customers,” said Bronce.
For her part, Penserga said the P4 to P8 increase in the family’s electric bill is manageable.
“We can absorb that cost. That is minimal. I am happy about the (income) tax exemption because I earn less than P10,000 a month. No more tax means more money to spend on more important expenditures such as food,” she said.
In an Inquirer report, Department of Trade and Industry (DTI) Secretary Ramon Lopez said the Train law would have minimal effect on the prices of prime commodities such as canned sardines, corned beef, instant noodles, loaf bread and toilet soap. (please see separate story)Lopez said some manufactures may not even adjust the suggested retail prices (SRPs) of their products even if prices of fuel products would increase.
Fare rate hike
Penserga, however, expressed concern when she learned that the Cebu Integrated Transport Cooperative (Citrasco) will file for a P6 increase on top of the current P6.50 minimum fare.
“Kun mo mahal ang presyo sa palaliton unya way increase sa sweldo, aw, mao rang kwentaha katong wala pa nang Train. Murag naglibog nako sa balaod,” said Penserga.
(If the prices of commodities will increase but there is no wage increase, it’s the same story when the Train law was not signed. I am confused with the law.)
Penserga receives a minimum wage of P366 while her husband is unemployed.
Penserga said her four children go to school. If the fare rate increases, she will have a hard time managing her income.
The DTI, meanwhile, the seven to eight percent increase in the price of fuel will have little implication on the prices of commodiities since fuel is just a small portion of the cost of producing goods and products.
“Our specific example is a can of sardines that costs P14. If you add the additional cost of fuel, it will only mean and a five-centavo increase. Normally, it is that small, we no longer adjust the SRP (suggested retail price),” Lopez said in Pilipino.
Lopez urged the public to inform the DTI through its hotline (751-3233) about manufacturers and stores taking advantage of increasing prices of goods due to the Train law. /WITH INQUIRER.NET