Scientist Group Calls Anew for Scrapping of EPIRA, VAT amid the Power Rate Hike

Published on October 25, 2008

With the impending 36 percent hike in electricity rates, AGHAM, an organization of scientists and technologists, called anew for the scrapping of the EPIRA or the Electric Power Industry Reform Act, and the VAT on electricity.

BY BULATLAT

The AGHAM (Science and Technology for the People), an organization of scientists and technologists, has called anew for the scrapping of the Electric Power Industry Reform Act (EPIRA).

Dr. Giovanni Tapang, AGHAM national chairperson said that as long as EPIRA allows the passing on of the costs and losses of distribution utilities and generation plants to the people, the rate of power would continue to increase.

The adjusted Manila Electric Company’s (Meralco) rates recently approved by the Energy Regulatory Commission (ERC) on its average distribution, supply and metering charges bode of a 36-percent power rate increase for consumers.

Tapang said the ERC’s ‘alphabet soup of recovery mechanisms’: Generation Rate Adjustment Mechanism (GRAM), Currency Exchange Rate Adjustment (CERA), Deferred Accounting Adjustment (DAA) result to increases.

Not the end

“These increases are reflected on the distribution utility charges and it is not yet the end of power rate increases. Come three months hence, NAPOCOR (National Power Corporation) and Meralco would apply for another adjustment for their generation rates on top of the current rate hike. As the economy sinks, we will be facing a never ending spiral of price increases allowed by the ERC under the EPIRA”, said Dr. Tapang.

The continuing privatization and deregulation of electric power by the EPIRA run counter to the interests of the Filipino people. It has only made electricity inaccessible due to ever increasing costs, Tapang pointed out.

“Like a gun pointed at our heads, there seems to be no escape from the barrage of increases coming from Napocor and Meralco. Electricity is used daily in our activities, yet the ERC, NAPOCOR, MERALCO and the Arroyo government seem unconcerned about the heavy impact these increases have in our lives”, noted Dr. Tapang.

VAT

Dr. Tapang said the Arroyo government should also be held accountable for the continuing Value Added Tax (VAT) imposed on electricity rates. He said that removing the VAT would immediately lower electricity rates by around 10 percent.

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