Pricing also key to policy on electricity

“ACCESS [to electricity] is not just the ability to connect or access to service itself, as it also includes a pricing context. It is not accessible if it is too expensive.”

Energy Secretary Jose Rene Almendras made this point as he disclosed that their thrust in the next six years is to make access to electricity readily available and affordable for everyone.

He added the Energy department’s new tagline “Energy Access for More” encompasses availability, supply, consistency, reliability and affordability of energy supply. “We target to achieve optimal pricing or the best possible price considering all realities.”

Almendras said they are developing a pricing framework for indigenous sources in the short term to evolve a methodology for pricing of indigenous energy resources in the medium term.

In the short term, his department will review tax issues affecting energy prices, such as the value-added tax
(VAT), real-property taxes and other local taxes; revisit the Electric Power Industry Reform Act (Epira), such as issues on lifeline rates, mandated rate reduction, loan condonation and cross-subsidy removal.

Almendras added they will strengthen the capacity of distribution utilities to contract their power supply from power generators or suppliers and for them to implement time-of-use and demand-side management programs.

Almendras also cited the need to upgrade and improve the National Grid Corp. of the Philippines’ transmission lines to achieve optimal energy pricing.

His department is also looking at launching the Wholesale Electricity Spot Market in the Visayas, as well as monitoring technical regulation of the players in the power sector.

For the downstream oil industry, Almendras said the Department of Energy will also review oil prices formulas and methodologies in a bid to improve transparency of pricing, among others.

The department will also work on resolving taxation issues with the Department of Finance, the Bureau of Internal Revenue and the Bureau of Customs, particularly on issues such as import duties, excise taxes, VAT on refined petroleum products, the biofuel chain and imported ethanol.

“Over the medium term, the Energy department will also work on the establishment of a reserves market for electricity and the implementation of open access and retail competition,” said Almendras. –Paul Anthony A. Isla / Reporter, Businessmirror