AUG.

29, 2013

NR # 3210

Explore indigenous sources of energy to reduce electricity cost - Arroyo

Exploration and development of indigenous sources of energy should be given priority by the government to reduce the cost of electricity in the country. House Bill 1909, authored by Reps. Diosdado Macapagal Arroyo of Camarines Sur and Gloria Macapagal-Arroyo of Pampanga, seeks to adjust the current tax impositions that tend to prejudice the indigenous energy sector. The proposed Electricity Rate Reduction Act of 2013 also seeks to maintain and uphold the competitiveness of indigenous sources of energy vis--vis imported fuels thereby increasing the countrys energy self-sufficiency, Arroyo said. Arroyo said the objective of the bill is to lower the government share in the exploration, development and production of indigenous energy resources other than those already covered by the Renewable Energy Act of 2008. Arroyo said the government should also set its share at the level that maintains the relative preference to indigenous renewable energy resources and still provide for a substantial revenue for the State and remove the disparities in tax and royalty treatment between indigenous energy resources and imported fuels. The State to utilize its share in the discovery, exploration, development and production of indigenous sources of energy to lower electricity cost, Arroyo said. Arroyo said the government impositions relating to indigenous sources of energy shall be effectively at par with or more favourable than analogous impositions on imported fuels in keeping with the Constitutional precept of preserving the benefits of national patrimony to the Filipino people. Though Congress has taken the right direction on renewable sources of energy, much is still left to be desired with respect to other indigenous sources of energy, Arroyo said. Arroyo said government impositions associated with making available such resources for electricity generation are even more burdensome than those applied on imported fuels resulting in higher prices of electricity generated from indigenous sources. Arroyo said the government royalties or share on indigenous natural gas was around P1.46/kWh, which was 5 to 8 times more than the taxes imposed on imported fuels like coal (P0.17/kWh, oil (P0.20/kWh) and liquefied natural gas (P0.29/kWh). A 2008 study by UP Professor Dante Canlas, former Director General at the National Economic Development Authority, has shown that a reduction of the natural gas royalties to lower the cost of electricity to industrial loads would induce economic output growth on account of greater competitiveness and productivity of Philippine industries. Incidentally, the study also concludes that the reduction of these royalties will provide government additional tax and non-tax revenues that would be more than sufficient to offset the foregone royalties collection in less than two (2) years from implementation, Arroyo said. (30) dpt