Group warns of ‘power bill shock’ if gov’t halts subsidy

The government’s plan to remove the subsidy on electricity rates in several provinces will “drastically force power costs in those areas to soar,” an energy and development think-tank warned on Tuesday.

In a statement, the Center for Energy, Ecology and Development (CEED) urged the Department of Energy to present a “just” transition plan for communities that would be affected by its plan to stop collecting charges for rural power development.

“While the gradual removal of subsidies for ‘rich off-grid areas’ might mean lesser universal charges for consumers in Metro Manila, it might mean raising electricity prices in Palawan, Mindoro and Romblon to an … unaffordable level, particularly for impoverished families in these areas,” said Gerry Arances, CEED executive director.

The group issued the statement after the energy department announced plans to revise electrification policies for far-flung areas, including stopping the collection of the “universal charge for missionary electrification.”

Borne by government

Energy Undersecretary Felix William Fuentebella said the cost of future electrification programs would no longer be charged to consumers, but would be borne by the government.

“[W]e are basically answering that question of why are we charging inefficiencies to the consumers. It should be the government. So we are addressing that,” Fuentebella said.

But CEED warned that without affordable power alternatives, the government’s plan to remove off-grid subsidies might drastically increase electricity prices.

“As most of these off-grid areas rely on diesel, it is quite likely that end-users in the area would not be able to keep up with prices stipulated in already existing power supply agreements,” Arances said.