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Senator Poe Hits Local Subsidies For Electric Cooperatives
Photo credit: Senate of the Philippines
In a recent hearing of the Committee on Energy, chaired by Senator Grace Poe, concerns regarding the subsidization of electric cooperatives by local government units (LGUs) came to the forefront. The committee resumed its inquiry into the recurring power outages plaguing the country, aiming to address the challenges faced by rural communities.
Senator Poe expressed her dissatisfaction with the current system, highlighting that electric cooperatives, which are responsible for providing electricity to remote areas, receive government preference and incentives.
She lamented the fact that LGUs are burdened with subsidizing these cooperatives, hindering the fulfillment of electrification goals. "It's unacceptable that the LGUs are the ones subsidizing [the cooperatives] so they can fulfill their electrification," Senator Poe emphasized in Filipino.
Supporting Senator Poe's concerns, Governor Edwin Jubahib of Davao del Norte disclosed that despite allocating substantial funds to the Northern Davao Electric Cooperative (NORDECO), their constituents continue to suffer from frequent brownouts and high electricity rates. Governor Jubahib pointed out that millions of pesos have been disbursed by their LGU, raising questions about the effectiveness of the current subsidization model.
In another development during the same hearing, Senator Raffy Tulfo, presiding over the Committee on Energy, directed attention towards the Department of Energy's long-term plans to address power supply shortages in the country. Senator Tulfo called for a review of the franchise tax of the National Grid Corporation of the Philippines (NGCP) in light of significant delays in the completion of 37 transmission projects. These projects have encountered delays of up to 820 days or 2 years and 3 months.
Furthermore, Senator Tulfo expressed concern that NGCP has been passing its franchise tax to consumers since 2011. He suggested that the Energy Regulatory Commission (ERC) should revisit Resolution No. 7, series of 2011, while also considering the possibility of imposing a regular income tax on NGCP instead of relying on franchise tax.
The senators' remarks highlight the urgent need for reforms in the energy sector. Addressing the subsidization issues faced by LGUs and the delayed transmission projects is crucial to ensure stable power supply and affordable rates for consumers nationwide. As the Committee on Energy continues its hearings, stakeholders are hopeful that concrete solutions will emerge, ultimately improving the overall energy landscape in the country.
Senator Poe expressed her dissatisfaction with the current system, highlighting that electric cooperatives, which are responsible for providing electricity to remote areas, receive government preference and incentives.
She lamented the fact that LGUs are burdened with subsidizing these cooperatives, hindering the fulfillment of electrification goals. "It's unacceptable that the LGUs are the ones subsidizing [the cooperatives] so they can fulfill their electrification," Senator Poe emphasized in Filipino.
Supporting Senator Poe's concerns, Governor Edwin Jubahib of Davao del Norte disclosed that despite allocating substantial funds to the Northern Davao Electric Cooperative (NORDECO), their constituents continue to suffer from frequent brownouts and high electricity rates. Governor Jubahib pointed out that millions of pesos have been disbursed by their LGU, raising questions about the effectiveness of the current subsidization model.
In another development during the same hearing, Senator Raffy Tulfo, presiding over the Committee on Energy, directed attention towards the Department of Energy's long-term plans to address power supply shortages in the country. Senator Tulfo called for a review of the franchise tax of the National Grid Corporation of the Philippines (NGCP) in light of significant delays in the completion of 37 transmission projects. These projects have encountered delays of up to 820 days or 2 years and 3 months.
Furthermore, Senator Tulfo expressed concern that NGCP has been passing its franchise tax to consumers since 2011. He suggested that the Energy Regulatory Commission (ERC) should revisit Resolution No. 7, series of 2011, while also considering the possibility of imposing a regular income tax on NGCP instead of relying on franchise tax.
The senators' remarks highlight the urgent need for reforms in the energy sector. Addressing the subsidization issues faced by LGUs and the delayed transmission projects is crucial to ensure stable power supply and affordable rates for consumers nationwide. As the Committee on Energy continues its hearings, stakeholders are hopeful that concrete solutions will emerge, ultimately improving the overall energy landscape in the country.
Jul 12, 2023
