Solon questions PSALM’s collection of universal charge

PARTY LIST Rep. Teddy Casiño today questioned the planned power rate increase of the Power Sector Assets and Liabilities Management Corporation (PSALM) to raise P140 billion worth of universal charges for stranded debts and contract costs from all grid-connected power consumers early next year.

“The consumers should not suffer the consequences of PSALM’s bad decisions. The original debt to be passed on to consumers was only P255 billion in 2001 as mandated by the Electric Power Industry Reform Act (EPIRA). It is unfair for PSALM to pass on the additional bad debts it incurred after it took over NAPOCOR. That was never part of the deal,” said Casiño.

“When EPIRA was passed, the understanding was that PSALM would privatize NPC’s assets to pay for P255 billion worth of NPC stranded debt. But because NPC and PSALM failed to do their jobs, they even borrowed more so the debt ballooned to P540 billion. So even if they already raised P474 billion from privatization, they still want to collect more from consumers through the universal charge. Why should our people suffer for their incompetence? This is unjust and cruel, considering we already have the highest power rates in Asia!” stressed Casiño.

“Debt and stranded costs should not be passed on to the consumers considering that power rates in the Philippines are already among the highest in Asia. These unsettled debts and stranded costs should instead be charged to the Malampaya fund. In fact, former DOE Secretary Jose Almendras already agreed to this,” he said.

“Besides, PSALM should first refund the P9.1 billion they ‘overcharged’ Meralco customers before considering any power rate hike. It should also refund members of the 90 electric cooperatives that they overcharged by at least P4.5 billion,” said the solon.

“Ni hindi pa nga nila ibinabalik ang napakalaking halagang nakolekta na nila e hihirit na naman sila ng dagdag na singil. Ibalik na nila ang P9.1 at P4.5 bilyon sa mga consumers,” Casiño added.

“Ang pangit naman ng salubong sa bagong taon na ibibigay ng PSALM sa mga consumers, puro na lang pagtaas ng singil ang inaatupag nila pero di naman iniintindi ang serbisyo. Nawawalang saysay ang sinasabing paglago ng ekonomiya kung palaging ganyan,” he said.

Meralco already implemented a round of rate hikes for its generation, transmission and system loss charges. It wants a P0.245 per killowat-hour (kWh) increase from various pass-through and other charges to consumers.

The lawmaker also called on Malacañang and the House leadership to immediately approve measures removing or reducing the value added tax (VAT) on electricity in order to prevent government from collecting windfall VAT revenues.

Casiño is the author of HB 1630 exempting electricity from VAT as well as House Bill 6416 which aims to cut VAT rates by half in the prices of oil, power and water. Casiño’s bill aims to reduce VAT to 6 percent for electricity, water services, and oil and petroleum products, in order to provide immediate relief to consumers and the domestic economy. The 50 percent reduction of the VAT rate will bring down prices of oil products by as much three (3) pesos per liter, electricity rates by at least 38 centavos per kilowatt hour (kWh) for lifeline electricity users and at least 50 pesos in the bills of residential water users.

“I am calling on Ways and Means Committee chair Rep. Isidro Ungab to immediately set a hearing for this bill and others measures that would alleviate the burden of rising prices,” said Casiño.

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