Press Release
December 1, 2017

Gatchalian: Retail competition can mitigate coal tax power rate hikes

Senator Win Gatchalian is calling on the Department of Energy to fast-track the implementation of the Retail Competition and Open Access (RCOA) circular to mitigate the effects of projected electricity rate hikes in the event that the huge increase in the excise tax on coal becomes law.

The circular, which seeks to finally implement the RCOA provision of the 16-year old Electric Power Industry Reform Act of 2001 (EPIRA), is expected to foster competition among electricity suppliers by giving consumers the freedom to select from where and what the kind of electricity to purchase. This is expected to drive down electricity costs and promote transparency in the energy sector.

"With the coal tax in place, all the more that we need to implement RCOA to democratize our power sector. The RCOA will help lower costs to protect consumers from the inflationary effects of the coal tax. Once you give the consumers the power of choice, makakapili sila whether they want coal, renewable energy o geothermal, kung ano man ang mas mura at sustainable sa kanila" said Gatchalian, the chairman of the Senate Energy Committee, during the fourth meeting of the Joint Congressional Power Commission (JCPC) on Wednesday.

The senator reiterated the expected impact of the coal tax on consumers. He estimates an increase of P10 in the monthly electricity bills of average households in 2018, P20 by 2019, and P28 by 2020, noting that these estimates are bound to grow as new coal plants come online in the near future.

Recalling the Senate deliberations on the coal tax hike earlier this week, Gatchalian said: "I was the lone dissenter on the coal tax because alam naman natin lahat, lalo na sa energy sector, that this will be passed on to consumers."

He added: "I think this meeting is very important because if ever the coal tax will be signed into law, then we will really feel the 300 pesos per metric ton tax on coal in our electricity bill," a comment which garnered assent from the Department of Energy officials, industry stakeholders, and private consumer groups present during the hearing.

The Department of Energy assured the JCPC that the legal hurdles of RCOA will be settled as soon as the revised circular is approved by the Energy Regulatory Commission and signed by the DoE Secretary.

"I highly commend the Department of Energy for its initiative to implement RCOA. Our end goal here is to drive down the price of electricity for the benefit of energy consumers," Gatchalian said.

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