Hontiveros presses energy officials to implement game-changing reforms to reduce electricity costs

Senator Risa Hontiveros (File Photo: Senator Risa Hontiveros/Facebook)

Senator Risa Hontiveros is advocating for game-changing reforms in the energy sector to alleviate the burden of high power rates on Filipino consumers. She insists on the need to reduce the National Grid Corporation of the Philippines (NGCP) and other private distribution utilities’ (PDUs) hefty Weighted Average Cost of Capital (WACC) and eliminate the value-added tax (VAT) imposed on system losses and lifeline subsidies.

“Kung magagawa agad ito, magiging maagang pamasko sa ating mga kababayan ang agarang pagbaba ng kuryente sa bansa. We should start making significant strides towards reducing the burden on Filipino consumers when it comes to their electricity bills,” Senator Hontiveros stated, reiterating further that the lowering of WACC and the removal of VAT are crucial steps in achieving more affordable electricity for all.

Hontiveros also emphasized the importance of a more rapid deployment of renewable energy to ensure universal access to modern electricity services, especially in social housing, rural electrification, and addressing energy poverty. These proposals are in line with the strategic framework outlined in the 2023-2028 Philippine Development Plan, aimed at reducing electricity rates for consumers.

During the budget deliberations of the Department of Energy, Energy Regulatory Commissioner Monalisa Dimalanta confirmed the completion of the fourth regulatory reset process (RP) for the NGCP and plans to initiate the RP for PDUs.

“This reset is expected to tame NGCP’s high revenues, unconscionable payout of cash dividends for its shareholders, and rationalize unwarranted operational expenses, including the ₱2.3 billion for Public Relations and Corporate Social Responsibility, ₱1.67 billion for Representation and Entertainment, and ₱1.1 billion for Advertising,” Hontiveros said.

She also questioned the staggering ₱8,729,751,797 billion budget allocated for Security and Janitorial services by NGCP. She expressed her concern about the magnitude of this expense item, which ranks second only to repairs and maintenance costs (P12,274,585,564).

“Marami bang dumi sa loob ng NGCP na kailangang linisin ng linisin bakit ganito kalaki ang budget sa janitorial services? May malaking banta din ba sa security ng transmission system at bakit konsyumer ang dapat kumarga nito sa pamamagitan ng transmission charge at hindi ang malaking intelligence fund ng Pangulo at ng ating security forces?,” Hontiveros asked.

In the past, Hontiveros has consistently urged the ERC to implement energy sector reforms, particularly addressing NGCP’s high 15% WACC, which she believes has led to unjustifiable expenditures. However, Dimalanta noted that the 50% reduction in the ERC’s 2024 budget will hinder their ability to review and comprehensively audit utilities, prompting Hontiveros to support the restoration of ERC’s budget.

ERC also revealed that it has also engaged in discussions with the Bureau of Internal Revenue (BIR) regarding VAT on electricity, a move Hontiveros supported to address issues like system losses and subsidies that are still subject to the 12% VAT.

“Unang hakbang lang ito. Sana ay maging mabunga ang mga pag-uusap ng ERC at BIR tungkol sa 12% VAT sa ating mga electric consumers. Hangga’t maaari ay alisin natin ang mga hindi makatwirang sinisingil sa ating mga kababayan. Tulad sa mahihirap nating consumers na dapat ay hindi na natin pinapapasan sa kanila,” Hontiveros said.

In the end, Hontiveros urged the ERC to swiftly implement these reforms to protect consumers’ interests and ensure utility companies operate in the public’s best interest.