Gatchalian: RCOA can help mitigate possible coal tax increase

Gatchalian RCOA can help mitigate possible coal tax increase

The Department of Energy is urged to hasten the implementation of the retail competition and open access (RCOA) as it could ease the projected impact of higher coal taxes.

“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,” Senator Sherwin Gatchalian said.

Gatchalian said that the RCOA circular will mitigate the effects of electricity hikes that will occur in the event that the huge increase in the excise tax on coal becomes a law.

“Once you give the consumers the power of choice, they will be able to choose whether they want coal, renewable energy o geothermal, whichever is cheaper and more sustainable for them,” he added.

The said circular seeks to implement the RCOA provision of the Electric Power Industry Reform Act of 2001 (EPIRA). It is expected to foster competition among power suppliers by giving the consumers the freedom to choose the type of electricity to use.

The RCOA circular is seen to bring down electricity costs and promote transparency in the energy sector.

Last week, the Senate approved the Tax Reform for Acceleration and Inclusion (TRAIN) bill. This includes a coal excise tax increase from P10 per metric ton to P100 per metric ton in its first year, P200 for the second year, and P300 in the third and following years.

Based on estimates, electricity bills of an average household is seen to increase by P10 pesos in 2018, P20 by 2019, and P28 by 2020. Gatchalian pointed out that these estimates are bound to grow as new coal plants are seen to go online in the future.

“If ever the coal tax will be signed into law, then we will really feel the P300 per metric ton tax on coal in our electricity bill,” he said.