Cusi questions Meralco on electricity rates increase

Lorraine Alberto, Micole Vergaño | January 16, 2018

Photo from GMA News Online

Energy Secretary Alfonso Cusi sent a letter of inquiry to Manila Electric Co. (Meralco) earlier on Friday questioning its decision of coming up with P0.0808/kWh hike in electricity rates on February due to the Tax Reform law.

"Papaano niyo kinompyut ‘yan? ‘Yan ang gagawin namin ngayon to scrutinize it, because we cannot just accept it as it is our responsibility to the consumers,” Cusi said.

Cusi cleared that he doesn't defying Meralco's plan to increase electricity rates but he just wanted the company to explain how it arrived in such amount because computing electricity rates is within the Energy's mandate in giving the best service to the public.

Meralco annouced earlier this week that the change of tax rates in fuel products such as diesel and coal and the re-imposition of value added tax (VAT) on transmission charges will be P0.0808/kWh starting next month.

For a typical household consuming 200 kWh per month there will be an additional P16.16 increase in electricity bills.

“We will provide our estimates, which are based on the provisions of the TRAIN (Tax Reform for Acceleration and Inclusion) act,” said Meralco Spokesperson Joe Zaldarriaga in an interview.

Due to the excise tax on diesel and coal, there will be an estimate from the power suppliers that the generation charge will increase by P0.0113 per kWh.

Diesel gets an excise tax of P2.50 per liter from zero starting this year, under the Republic Act No. 10963 or TRAIN while coal’s excise tax rate was also raised from P10 per metric ton to P50 per MT.

According to Meralco, the Tax Reform law established the 12 percent VAT on transmission charges which results to an increase of P0.0670 per kWh.