Archive > No. 66 - June 2002

II. IN FOCUS
Electric Power Industry Reform Act of 2001
(RA 9136)
The public clamor against the charging of the power purchase adjustment has not abated. To ease the tension, Congress has proposed amendments to bring down power prices. One of the bills is SB 2140 (Committee Report 51), a substituted version of Senate bills 2109, 2120 and resolution 230. This measure proposes to amend sections 6, 11, 21, 34, 47, 50, 51, 68 and 80 of the Electric Power Industry Reform Act of 2001 (RA 9136).

First, it requires sales and supply of generated power by all electric power industry participants to be value-added tax zero-rated. It likewise subjects distribution utilities to franchise tax on their wheeling and captive market supply revenues.

The measure prohibits the imposition of the universal charge on the electricity output produced by a self-generation facility owned by an end-user for its own consumption, including households, hospitals, medical facilities, hotels and shopping malls. Furthermore, the PSALM Corp. would be allowed to recover P0.42/kWh from the universal charge within 15-25 years. Tax exemption privileges are also provided to PSALM Corp., TRANSCO, and the privatization of NPC assets.

Meanwhile, Sen. Edgardo Angara filed SB 2158 as an alternative bill for the opposition. It directs the NPC to share the cost shouldered by end-users in paying its stranded costs and debts. Moreover, the PPA charged by distribution utilities would be limited to 23 centavos per kWh. Cross-ownership between distribution companies and generation companies is not allowed, thus requiring divestment. The bill does not allow distribution companies to buy power from affiliated generation companies prior to divestment.

SB 2158 also exempts end-users consuming less than 100 kWh per month from the PPA, while those consuming 100 to 300 kWh per month would get a 50% discount. Since Congress has adjourned, the public will have to wait for the ERC’s decision on the PPA in July.

III. Where the Bills Are
Selected National Measures
(As of 8 June 2002)