Cusi seeks audit of P75-B energy subsidy fund

By Myrna M. Velasco – June 18, 2018, 10:00 PM
from Manila Bulletin

Energy Secretary Alfonso G. Cusi is proposing an audit of the P74.883 billion worth of collections on universal charge for missionary electrification (UCME), as he noted that this energy subsidy fund is not just benefitting marginalized consumers but even the owners of resorts and big commercial establishments in island-provinces.

“I proposed for an audit, but there are some sectors already objecting to it,” he stressed. Nevertheless, the energy chief emphasized that he is keen on pursuing that because it distorts the government’s policy direction of just supposedly subsidizing end-users that do not have as much financial resources to make ends meet.

The subsidy portion being charged against the UCME is collected from all Filipino consumers in their monthly electricity bills. It accounts for the cost difference of the regulated rate approved for island-grid areas versus the true cost of power.

Many areas under the Small Power Utilities Group (SPUG) operations of the National Power Corporation (NPC) are just passing on rates ranging from P8.00 to P12.00 per kilowatt hour, although the actual rate is P14 to P20 per kWh. The tariff difference then is charged against the UCME.

Given that, the subsidy cost being passed on then to all electricity consumers via the UCME line item in the bills could be in the range of P4.00 to P8.00 per kWh; depending on the approved tariffs of these island-grids. The total cost is divided among all Filipino ratepayers, hence, the cost pass-on appears marginal if seen in the bills.

But Cusi observed that it’s not just the penny-pinching household consumers that have been benefitting from the subsidies – but even deep-pocketed resort and hotel operators as well as mall owners that are operating in these island-anchored power service domains.

“In the island-provinces, you have the UCME – the subsidy that people are paying. But even the resorts and malls are entitled to the same subsidy,” Cusi emphasized.

To the energy chief’s assessment, these businesses have the wherewithal to pay the actual cost because they are passing on the electricity consumption charges anyway as component of their operating and service costs, thus, he is batting for a review of the UCME subsidy scheme.

The collection of UCME, being a separate line item in the electric bills, is done by the distribution utilities and other energy suppliers and subsequently remitted to the Power Sector Assets and Liabilities Management Corporation (PSALM) being the fund administrator.

Aside from channeling it as direct subsidy to electricity tariffs, state-run NPC also taps into the fund on its energization drive of the SPUG areas.

Based on PSALM data, UCME collections already reached P74.883 billion as of January this year, with additional interest charges accruing at P44 million. Out of the total collections, PSALM further reported that it already disbursed about P74.895 billion, therefore, the remaining amount in the fund now just hovers at P32 million.

For the month of January alone, PSALM noted that it disbursed P1.040 billion to NPC-SPUG “to fund the missionary electrification functions, chargeable against the UCME fund.”