Consumer group calls for abolition of electricity cross-subsidy for poor

consumer group calls for abolition of electricity cross subsidy for poor - Consumer group calls for abolition of electricity cross-subsidy for poor

THE government should stop enforcing a scheme that subsidizes parts of some poor power users’ bills, a consumer group said.

A proposed measure by the Senate Energy committee seeks to extend for another 20 years the implementation of the lifeline rate, a subsidized rate benefiting poor consumers provided under the Electric Power Industry Reform Act (EPIRA).

In a comment, Laban Konsyumer proposed “to repeal and terminate” the cross-subsidy scheme, which is “is fair and reasonable to all consumers.”

“At the moment non-lifeline consumers subsidize the amount of Php 0.0604 per kilowatt-hour as a lifeline subsidy in their bill(s),” the group noted.

The Energy Regulatory Commission may remove such a mechanism after introducing a new universal charge which replaces it, according to Section 74 of Republic Act No. 9136, or the EPIRA.

By 2021, “there should be no more authorized cross-subsidy,” Laban Konsyumer said. EPIRA will be turning 20 next year.

In June, Senator Sherwin T. Gatchalian proposed Senate Bill No. 1583 extending the subsidy.

“With the expiration of the lifeline rate and thus higher electricity rates for marginalized end-users looming next year, this measure is filed,” Mr. Gatchalian said.

Section 73 of the EPIRA provides for this mechanism and the continuation of its enforcement. The imposition of the present subsidized rate will end next year after it was extended in 2011.  In 2019, 2.41 million poor customers of Manila Electric Co. (Meralco) each saved P1,567 annually from the lifeline rate.

“This bill extends the lifeline rate for an additional 20 years or up to 2041 in order to continue the much-needed assistance to low-income electricity consumers, which in turn enables them to access electricity and improve their lives,” Mr. Gatchalian said. The measure remains pending at the committee level. — Adam J. Ang

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