Establish a consumer watchdog on energy companies

By Roger Bantiles

THE ENERGY companies, from generation to transmission to distribution, seem to be good boys these days. They must know, as they ought to, that President Rodrigo Roa Duterte does not have much tolerance for foolishness, stupidity or incompetence.

Power companies and their personnel are of course supposed to be good at management, trouble-shooting, projection and prevention of problems in their industry line. Otherwise, they have no business being in the energy sector.

Energy is the blood flow of the modern economy. Its interruption will seize up and lock economic activities down the line.

Worse, it may even cause the death of people on life support systems in hospitals affected by power interruption.It is about time that energy companies appreciate their responsibility to the consumers and the Filipino public.

Not all energy companies are created equal, though. Some are more equal than others. The National Grid Corporation (NGCP) for example is the sole franchisee of electricity distribution in the Philippines.

“The NGCP pays only a 3% franchise tax in lieu of all national and local taxes. Power generating and distributing companies, on the other hand, are required to pay corporate and value-added taxes.

The National Tax Research Center (NTRC) estimated at P8 billion the amount of tax foregone by taxing the NGCP at its current rate,” wrote Ms. Melissa Luz T. Lopez in an article published on 26 February 2015 in a national paper.

Because of the low franchise tax, NGCP hauled in and distributed “P64 billion in dividends to its shareholders,” according to the same article. This P64 billion was taken from the pockets of Filipino consumers.

Now who can collect these foregone taxes? Even NGCP’s Deputy Executive Director Teresita Solomon was quoted in the article as admitting that the “current franchise is disadvantageous to government” since the “transmission business has become profitable.”

Has a law been passed to amend the NGCP’stax obligations and the disadvantageous franchise?

Should not NGCP’s transmission monopoly be re-studied as well as its structure of ownership with the objective of democratizing it and spreading its ownership to more Filipinos?

Power generators, the NGCP and the power distributors have public franchises that obligateto provide quality and uninterrupted service.

There ought to be a law that punishes these power companies for breach of contract to provide quality and uninterrupted service.

Mindanao, for example, suffered two massive and still unexplained blackouts in February 2014 and April 2015. The companies responsible should be made to answer for all the damage caused by the interruption of service.

A law should also be passed creating a watchdog body composed mainly of energy consumers to watch over the industry players to keep them to their contract and prevent sabotage and unreasonable demands.

This watchdog body should also help the government plan the construction and coming on stream of new capacity, especially in renewable energy.

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Sunday, 19 January 2020
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