Low-income customers of the Manila Electric Co. (Meralco) have begun getting lower electricity rates with the implementation of Meralco’s new lifeline rate program.
Meralco vice president and head of utility economics Lawrence Fernandez said that under the program, discounts to lifeline rates or marginalized customers are subsidized by regular customers.
Under the lifeline rate program, qualified customers should have a monthly electricity consumption of 100 kilowatt hours or below to avail of the discount ranging from 20 percent to 100 percent in their Meralco electricity bills depending on their actual consumption.
He did not give figures for the lower rates but said the add-on to other customers will go down compared to before.
Fernandez said the program is revenue neutral for distribution utilities/electric cooperatives like Meralco.
He said the lifeline program has been in operation since the early 2000s. “Only the eligibility criteria has been changed, following the enactment of a new law by Congress,” Fernandez said.
Meralco urged qualified customers to register to avail of the lifeline rate discount.
Sen. Francis Escudero meanwhile filed Senate Bill 2301 which seeks to exempt electricity sales from the 12% value-added tax (VAT) as per the amended National Internal Revenue Code.
Under the measure, the following transactions shall also be exempt from VAT: sale of electricity by generation, transmission and distribution companies and electric cooperatives; and services of franchise grantees of electric utilities.
“This bill seeks to address the high electricity cost by exempting electricity sale from VAT,” he said.
By granting relief, he said the government can lower the operating costs of industries and businesses, temper inflation, and increase disposable household income while generating revenue windfall through increased economic activity and consumption.
The bill has passed the first reading and is now up for discussion before the Committee on Ways and Means.