Umali: Amend, don't repeal EPIRA

by RG Cruz, ABS-CBN News

Posted at Jan 14 2014 07:14 PM | Updated as of Jan 15 2014 03:14 AM

MANILA - House energy committee chairman Reynaldo Umali on Tuesday rejected calls to repeal the Electric Power Industry Reform Act (EPIRA) amid an outcry over soaring electricity rates in the country.

In an interview, Umali said the law merely needs to be amended and not repealed.

"Iyung repeal eh hindi ko pa nakikitang kailangan nating gawin iyun. I think we need to tweak the EPIRA law (and) not necessarily to repeal it. Propose certain amendments...The idea is to enhance iyung existing mechanisms natin, not to overhaul it," he said.

The committee's vice-chairman, Rep. Miro Quimbo, also wants to revisit the imposition of a value-added tax on power, now currently at 12%.

"Pagkakaroon ng VAT on both the generation side, as well as doon sa distribution ng MERALCO, iyan ay mga buwis na ipinapasa sa publiko," Quimbo said.

"Kailangan nating pag-aralan iyan dahil kung kinakailangan nating ibalik, dati na meron lang fixed franchise tax or kung ano mang buwis na pwedeng ibigay para sa pamamaraang mas bumaba iyong babayaran ng consuming public," he added.

"Sabi nila, pag tinanggal iyan, may mga studies ang World Bank na bababa ng halos 85 centavos per kilowatt [hour] ang babayaran ng consumer, kung ire-revise natin iyung tax structure o tatanggalin natin iyong VAT," he said.

Quimbo said the government must study how such a reduction will affect the government's finances.

He, however, noted that lower electricity rates could entice more investors, which could lead to more jobs.

"Doon iyung direksyon. That one point is really revisiting kung kinakailangan nating tanggalin iyong VAT pagdating sa power generation, as well as power distribution na tingin ko malaki ang ibababa pagdating talaga sa babayaran ng publiko," he said.

Another issue that Quimbo wants to review is cross-ownership. He said the government might need to regulate firms that both produce and distribute electricity to consumers.

"Hindi na marapat ba na iyong nagdi-distribute ng power, iyung nagdadala nito sa mga tahanan, siya rin ang may-ari ng power plant? Tingin ko, kailangan nating aralin iyon kasi tila meron inherent conflict doon. I think that needs to be looked at and regulated."

In a press statement, Eastern Samar Rep. Ben P. Evardone said he filed on Tuesday House Bill No. 3676 to prohibit cross-ownership in the generation and distribution companies.

Evardone said distribution companies, their subsidiaries, officials, stockholders and their relatives should be banned from holding interest in generation companies, and vice versa.

Last December, the Supreme Court suspended the planned imposition of higher electricity rates in Meralco service areas.

The distribution utility claimed it was a mere pass-through charge because of the higher generation costs charged by generation companies due to some scheduled and unscheduled power plant shutdowns.