The Energy Regulatory Commission (ERC) has suspended its decision allowing the National Grid Corporation of the Philippines (NGCP) to charge the various distribution utilities a monthly three percent franchise tax.
It said Thursday the decision was unanimously agreed by commission members.
Monalisa Dimalanta, ERC chairperson, said in a message to reporters the decision translates to a one-centavo per kilowatt hour reduction in power rates.
The decision, however, has not yet been formally adopted but once it does the NGCP franchise tax of three percent will no longer be passed on to consumers.
She said Section 9 of Republic Act 9511 that created the NGCP mandated the payment of a franchise tax equivalent to three percent of its gross receipts.
ERC Resolution No. 07 issued in 2011 permitted the inclusion of the three percent franchise tax in the monthly billing the NGCP charged the distribution utilities each month.
“The commission continuously examines existing rules and regulations to determine whether the mandates under the Electric Power Industry Reform Act of 2001 are faithfully fulfilled. With the consumers’ interests in mind, as well as upholding the rule of law, the commission resolved to suspend ERC Resolution No. 07, Series of 2011, by a unanimous vote,” the ERC said.
NGCP said it will address the reported suspension upon receipt of the ERC resolution in full.
