With the Philippines’ electricity rates now ranked as the fifth highest in the world, Bayan Muna Representative Teddy Casiño on Tuesday filed a measure that would help reduce electricity rates “by putting it in the hands of the people”.
Dubbed the “One Million Solar Rooftops Act”, House Bill 5405 mandates the government to encourage the use of small solar power systems in homes and business establishments through various financing packages and fiscal incentives.
Under Casiño’s proposed legislation, Pag-Ibig, GSIS and SSS will be mandated to offer soft loans for members who want to install solar power rooftops in their homes and businesses. The measure covers solar power systems with a capacity of 10 kilowatts (kW) and below for residential, and 500 kW and below for business establishments.
Pag-Ibig, also known as the Home Development Mutual Fund (HDMF), helps its members buy their houses. The Government Service Insurance System (GSIS) and the Social Security System (SSS) are pension funds of public and private employees, respectively.
The bill also requires electricity distributors like Meralco to allow small solar power users to feed excess power into the system and get paid for it through a net-metering arrangement, resulting in savings in their monthly bills.
“This measure will make ordinary electric consumers producers of electricity as well, thereby empowering them and opening up various options for reducing their electricity bill,” the party-list lawmaker said.
“If government is serious in implementing the RE (Renewable Energy) Law, it has to accelerate its permitting process, start awarding solar service contracts, and allow homeowners and commercial establishments to produce their own power needs by using their rooftops,” he added.
“It is hoped that through this, the demand for clean solar energy, as well as the opportunities for local manufacturing and related solar energy products and services, will increase,” the author stated.
The Trade Union Congress of the Philippines (TUCP) revealed early this week that the Philippines has the highest electricity in Asia and the fifth highest in the world. Other countries who belong in the top five are Denmark, Germany, Italy, and Austria.
Renegotiate IPP contracts
In a related development, the House committee on energy approved a motion to draft a resolution urging the Power Sector Assets and Liabilities Management (Psalm) to renegotiate the 19 contracts with independent power producers (IPP) sealed in the last 10 years.
“The country overpaid the IPPs by $10 billion dollars based on normal costing. The $10 billion would translate to 10 power plants. It is enough to take care of our power needs in 10 to 20 years,” Parañaque Representative Roilo Golez, a member of the House energy committee, said in a news conference.
Casiño, for his part, said that the review and renegotiation of 19 IPP contracts will reduce or totally do away with P74 billion worth of stranded contract costs that is being planned to pass on to electricity consumers via a monthly P0.36/kWh universal charge.
The House energy committee will also ask the Energy Regulatory Commission (ERC) to suspend ongoing hearings on Psalm’s petition to impose the said universal charge while the renegotiations are pending.
The universal charge is a pass-through charge imposed by Meralco for the recovery of stranded debt and contract costs of the National Power Corporation (Napocor).
Stranded debts are obligations left over after proceeds from power plant sales have been used to pay for debt originally meant for the construction of these facilities. Stranded costs are charges resulting from the rise of foreign exchange and fuel prices as guaranteed in the power purchase agreements between Napocor and IPPs.
Over the weekend, Meralco said it will increase its electricity rates to an average 14.19centavos per kilowatt hour
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