ELECTRIC consumers in the province, including those catered by Central Negros Electric Cooperative (Ceneco), should brace for up to P0.05 per kilowatt hour (kWh) increase in power rates as the newly-signed tax reform law takes effect.
Engineer Leomel Tambanillo, manager of the Corporate Planning Department of Ceneco, Thursday told SunStar Bacolod the tax reform will initially result to a tax variance of P40 on coal.
From P10 per metric ton (MT), the Train law increases the tax on coal to P50 per MT this year.
Tambanillo said that for diesel, the P2.50 per liter hike on excise tax will also contribute to increase in the power rate.
“Based on our initial computation, the upward adjustments on excise tax would result to P0.03 to P0.05 per kWh increase in our rate given that bulk of Ceneco’s generation sources are using coal and diesel,” he said, adding that “this is something our consumers should brace for.”
The electric cooperative caters to the biggest number of electric consumers in Negros Occidental, particularly those in cities of Bacolod, Bago, Talisay and Silay, and towns of Murcia and Salvador Benedicto.
Its current demand is almost 155 megawatts (MW), higher than the contracted supply of 137.9 MW.
Ceneco is getting its base load of 64 MW from Kepco-Salcon Power Corp. (KSPC), a coal-fired power plant in Naga, Cebu.
The three other sources include Palm Concepcion Power Corp. (coal) in Iloilo, supplying 35 MW to Ceneco; Green Core Geothermal Inc. (geothermal), 20 MW; and Energreen Power Development and Management Inc. (diesel), 18.9 MW.
The Tax Reform for Acceleration and Inclusion (Train) law signed by President Rodrigo Duterte in December last year increases the excise tax on coal and fuel products.
Using Ceneco’s computation, a household, for instance, that consumes 200 kW a month will pay P10 more specifically as additional generation charge.
This is still on top of other possible factors that normally cause increases on electricity rate like additional charges on transmission and systems loss, among others.
Tambanillo said the “sure” increase is only applicable to new delivery of coal and fuel.
This means that generation utilities will have yet to fully consume their remaining inventories before any adjustments on excise tax can be made.
Ceneco projected that the power rate increase brought by Train law will be felt by its consumers during the first quarter of the year, most probably starting the February billing.
“The computation for the billing this month is still based on December cost thus, the rate for January is not yet affected by the Train law,” he added.
Unfortunate event
For Ceneco president Roy Cordova, the increase resulting from the implementation of the tax reform law is an unfortunate event.
He said that since about 80 percent of the cooperative’s power supplier is coal-fired power plants, it is expected that prices of electricity would be higher.
Amid the implementation, Cordova said they are hopeful that the law will still be revisited for further “check and balance” purposes.
“We are thankful that some progressive groups are questioning the tax reform law at the Supreme Court. This needs to be given a second look,” he added.
The Ceneco official also pointed out that the increase brought by Train is a “pass-on” charge and beyond the control of the cooperative.
The only fixed rate being collected by the utility is the distribution charge, he added.
With the looming increase, Cordova urged anew consumers to practice energy conservation to lessen the cost of their electric bills.