The Department of Energy issued an advisory asking local government units to use the national wealth tax generated from energy projects they host to bring down the electricity rates through subsidy and non-subsidy schemes.
Energy Secretary Raphael Lotilla is referring to energy projects such as the exploration, development, utilization, and exploitation of indigenous energy resources, including renewable energy and other energy sources.
Lotilla said the rising and volatile prices of coal and oil in the international market had affected the electricity rates of customers in several areas nationwide, particularly those being served by distribution utilities and electric cooperatives sourcing their power from plants utilizing local fuel.
“To alleviate the plight of electricity consumers bearing the high cost of electricity, the DOE enjoins all concerned LGUs to prioritize the use of NWT to reduce the cost of electricity of their constituents in accordance with the relevant laws, rules, and regulations,” Lotilla said.
The DOE also asked the cooperation and coordination among LGUs, the Department of Interior and Local Government, the Department of Budget and Management, and other concerned government and private entities in making the mechanism work to address the high electricity costs that consumers are facing.
Lotilla said the subsidy and non-subsidy schemes are pursuant to the provisions of several laws, rules and regulations and issuances such as Sections 289 to 294 of Republic Act No 7160 or the Local Government Code of 1991; Rule 29 (B) of the implementing rules and regulations of RA 9136 or the Electric Power Industry Reform Act of 2001 and 4 Section 20; and Rule 2, Chapter 5 of RA 9613 or the Renewable Energy Act of 2008.
Lotilla asked the LGUs to maximize the benefits of all energy projects.
The DOE, the LGUs, the provincial, city/municipal and barangays can use their national wealth tax share through subsidy or non-subsidy schemes, he said.
Subsidy means the LGUs, depending on their share, can pay for a portion of the consumers’ electricity bills, for example, the first 10 kilowatt-hours, or use other determinants in allocating equal or equitable shares of the NWT for all consumers.
The DOE said the LGUs could also identify the more appropriate beneficiaries, depending on the capability to pay of the consumers.
Non-subsidy schemes may involve funding the cause of high electricity rates.
The DOE said the LGUs could use the NWT to provide improvements in the DUs/ECs’ systems and facilities to reduce system losses or to enhance the same, which would lower the cost of electricity since the DUs/ECs need not fund and recover the necessary improvements in their systems.
The DOE said the LGUs have the discretion to identify the proper and appropriate schemes to be employed as the amount of NWT shares differs from one LGU to the other, as well as the number of electricity consumers within the jurisdiction of each LGU.
It said any scheme to be employed should be coordinated with the concerned DU/EC.
