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Gatchalian says condo, rest house owners get unintended electricity discounts

Senator Sherwin Gatchalian on Tuesday said owners of condominium units and rest houses get unnecessary discounts through the lifeline rate subsidy to electricity consumers.

During a Senate hearing, Gatchalian, chair of the Committee on Energy, said the alleged leakages of lifeline rate subsidy to electricity consumers who are not the target of the relief must be plugged, as he pushed for the extension of this subsidy's implementation until 2041.

"This is the loophole and the gap that I see in this law. Even after 20 years of enactment, unfortunately, it seems to me na pinabayaan na lang natin ito at wala na tayong ginawa," Gatchalian said, calling the attention of the Energy Regulatory Commission.

Under the current lifeline rate, customers with an average monthly consumption of 100 kilowatt hours (kWh) and below are entitled to discounts.

Comparing the poverty incidence of 12.10% and the number of lifeline rate beneficiaries which comprised around 33.06% of power consumers in 2018, Gatchalian said the leakages during that year could amount to about P900 million.

"Lumalabas in 2018, P937 million out of that P2.1 billion [total lifeline rate subsidy] went to non-marginalized consumers," he said. "The intention is good but there are leakages that have been detected throughout the years."

The Department of Energy and the ERC were not able to present any comprehensive report or evaluation of lifeline rate subsidy beneficiaries during the hearing.

For the past eight years, lifeline rate subsidies averaged to about P1.6 billion annually, according to Gatchalian.

This is funded through a cross subsidy, pursuant to Republic Act 9136 or the Electricity Power Industry Reform Act of 2001. This means that other end-users are shouldering its cost.

Gatchalian underscored that middle income consumers are also paying for these subsidies, hence its usage must be carefully monitored.

The DOE and ERC both agreed that the identification of beneficiaries must be more targeted.

"If the residential consumers are in a settlement and resettlement area, those areas that are occupied by our urban poor, then there will be zonal identification of these communities for us to identify who should belong to those beneficiaries of the lifeline and we should be able to identify as well who should provide," DOE Director Mario Marasigan said.

Laban Konsyumer, meanwhile, suggested that the lifeline rate must be subsidized by the national government, not by consumers.

"At the moment, non-lifeline consumers subsidize the amount of P0.0604 per kWh as lifeline subsidy in their bill. After 20 years from the EPIRA, there should be no more authorized cross subsidy," Laban Konsyumer president Atty. Vic Dimagiba said in a position paper submitted to the panel.

"The national government should assume the payment of the lifeline subsidy to the power industry stakeholders," he added.

The ongoing hearing aims to address the loophole on the lifeline rate subsidy and to fine-tune Gatchalian's bill seeking to extend its implementation for 20 more years. —KG, GMA News