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Sunday, December 18, 2005
Expanded VAT pushes electric bills up
KORONADAL CITY -- Electricity rates in the province and nearby areas are to increase by three to six percent due to the implementation of the expanded value-added tax (VAT), an official of a local electric cooperative said.
Santiago Tudio, general manager of the South Cotabato I Electric Cooperative (Socoteco I), said the increase would already be included in the bills of local consumers starting this month.
Tudio said the computation of the new rate increase would be based on the area's power generation mix.
Socoteco I generate supply from hydro and geothermal sources that constitutes around 60 to 70 percent of the generation mix. The rest of the area's power requirements are sourced from the diesel-powered plants operated by independent power producers of IPP's.
"The expanded VAT charges would come from the expanded VAT on diesel fuel used by the IPPs that are eventually passed on to us. None of these collections goes to the cooperative," Tudio however explained.
He said the computation on the expanded VAT charges was based on the guidelines released late last month by the Energy Regulatory Commission.
The government implemented the expanded VAT, which mandates a 10 percent levy on petroleum, electricity and other services not covered by the initial VAT law, starting last month.
The imposition of the expanded VAT on petroleum products immediately hiked fuel prices by P2 to P3 per liter.
Socoteco I currently charges P2.39 per kilowatt-hour (kwh) for its generation system charge. The total rate per kwh, including all other charges, will reach P4.87.
Since the National Transmission Corporation is just passing on the charges to them, he said, the new rate increase not result into more revenues for the electric cooperative.
"Our consumers are still considered fortunate compared to those from other areas because we are not highly dependent on diesel-powered plants. Our rates are still much lower when compared to other areas in Luzon and Visayas," Tudio added. (Allen V. Estabillo)
(December 12, 2005 issue)
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