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Monday, November 21, 2005
Power regulatory body okays power rate hike
By Edmund Sestoso
THE Energy Regulatory Commission (ERC) has given the go signal to the two electric cooperatives in Negros Oriental to enforce a power rate increase to cushion the effect of the expanded value-added tax (VAT).
ERC public information officer Elmar Agir who was in Dumaguete City this week confirmed that the regulatory body approved last November 7 ERC Resolution No. 20 that implemented Republic Act No. 9337, the expanded VAT law on the electricity sector.
Agir explained that the resolution authorized power generation companies, the National Transmission Corporation (Transco), and power distribution utilities (DU) to impose the expanded VAT law on electricity sales.
"Electricity consumers can rest assured that the ERC has done an extensive review on the implementation measures of the expanded VAT affecting the electricity sector. Consumer protection is a paramount concern of the ERC," Agir quoted ERC Chairman Rodolfo B. Albano, Jr. as saying.
Even before the ERC resolution, top officials of Negros Oriental 2 Electric Cooperative (Noreco 2) had informed consumers it was increasing its rate effective this month.
However, Noreco 2 finance manager Dionefred Macahig clarified that the cooperative was still drafting the specific guidelines on the actual rate it would pass on the customers.
Agir assured that the increase would only be eight percent because of the lifting of the two national franchise tax and "some items" were zero-VAT rated,
The expanded VAT on electricity would be based on the gross receipts (GRs) on sales and services of electricity by generation, transmission, and distribution companies.
The GR, he said, would be the net of all discounts and gross of penalties.
It does not include the Energy Tax, benefits to host communities, security deposit on metering machines, and the Universal Charges imposed under the Electric Power Industry Reform Act.
"The ERC would like to emphasize that the electricity providers will not earn out of the VAT transactions. This is a pass through charge that is revenue-neutral. The ERC will perform confirmatory process on VAT imposed by the Generation, Transmission, and Distribution Utilities," said Agir.
(November 20, 2005 issue)
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