Subsidized power rates to benefit 2.02 million poor households

MANILA, Philippines—Consumers with monthly electricity consumption of 100 kilowatt-hours or less will continue to enjoy subsidized electricity prices for 10 more years after President Benigno Aquino III signed into law the extension of this socialized pricing mechanism.

According to the Department of the Energy (DoE), the extension of the so-called lifeline rates up to 2021 will benefit 2.02 million marginal households nationwide.

“In line with the President’s anti-poverty programs, it is the position of the department that the extension of the lifeline rate will ensure that the poor and underprivileged sector would still be able to afford electricity services,” the DoE said in a statement.

Lifeline rates refer to the subsidized rates given to customers with up to 100 kWh consumption every month. The discounts given to these consumers are shouldered by those with higher electricity consumption.

The implementation of the lifeline rates would have lapsed on June 26 this year if the President did not sign the law extending this subsidy mechanism.

Section 73 of the Electric Power Industry Reform Act (Epira) provided for a lifeline rate for the marginalized end-users that was set by the Energy Regulatory Commission. It was exempted from the cross-subsidy phaseout, which was provided in the Epira law for a period of 10 years, unless extended by law. The Epira was passed in June 2001, which meant that the 10-year period provided for lifeline rates would have expired this month.

Under the lifeline structure of Manila Electric Co. (Meralco), the country’s biggest power distributor, customers using up to 20 kWh a month are free of charge. Those using 21-50 kWh are enjoying a 50-percent discount in rates; 51-70 kWh users are getting a discount of 35 percent; and 20 percent for 71-100 kWh consumers.

There is, however, a fixed monthly metering charge of P5, in accordance with a 2008 decision of the ERC.

Meanwhile, the DoE also lauded the enactment of the law extending the term of the Joint Congressional Power Commission (JCPC) for an additional 10 years.

“This will help ensure the continued partnership of the executive department and the legislative department in implementing the provisions of not only the Epira but the Renewable Energy Act of 2008 as well,” the DoE added.