Coal tax to raise power costs, drive off investors — DoE

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A PROPOSED LAW that will tax the use of coal will be a setback for the country, which is already at a disadvantage because of its high cost of electricity, the Department of Energy (DoE) said.

“It is a problem for DoE because DoE is looking for ways to bring down our tariffs so that we can be competitive in attracting the manufacturers to our country. So that would make our job doubly difficult,” DoE Secretary Alfonso G. Cusi told reporters on the sidelines of a Senate hearing on Tuesday.

He said any form of tax that will be passed on to consumers would result in raising electricity cost.

“We already have the highest [power rates] in our region, and they will rise further,” he said.

Mr. Cusi’s comments on the proposal, which was approved by the Senate, follows Senator Sherwin T. Gatchalian’s earlier remarks on the bill, which will be heard soon by both Houses of Congress.

Mr. Gatchalian said the country sources 50% of its energy supply from coal-fired power plants. At such, the impact of a P100 increase in excise tax on coal will result in a P4.78 increase in the bill of an average household consuming 200 kilowatt-hours (kWh) a month, he said.

For a P200 increase, the increase in power rates will be P9.57, and at P300 the corresponding rise is P14.35. At P600, the increase is almost P29 per kWh.

Mr. Gatchalian said 27 electric cooperatives source their supply of electricity from 100% coal. This is quarter of the total electric cooperatives in the country, he said.

“They serve around 2.7 million households… that is 10% of the total households of the entire country,” he said.

In effect, the 2.7 million families being supplied by 100% of coal, will feel a P10 increase at P100 per metric ton excise tax and will feel P20 increase at P200 and P28 increase at P300, he said.

“Unfortunately in our regime right now, coal is a direct pass on cost to the consumers so any increase in the cost of coal, will come straight from the pockets of consumers,” he said partly in Filipino.

Mr. Cusi also told reporters that the DoE’s commercial arm Philippine National Oil Co. (PNOC) has received unsolicited proposals from three foreign entities that are keen to enter into a partnership to develop an integrated liquefied natural gas (LNG) facility.

“What I was informed (is) there is Kepco, there is Lloyds and CNOOC,” Mr. Cusi told reporters on Tuesday.

PNOC President and Chief Executive Officer Reuben S. Lista did not immediately respond to a request for details on the three entities. — Victor V. Saulon