ERC plans to raise lifeline rate threshold

More 4Ps, low-income families to get free electricity

MANILA, Philippines —  The Energy Regulatory Commission (ERC) is moving to raise the lifeline rate consumption threshold to expand free electricity access for more low-income families, including 4Ps beneficiaries.

Under a draft ERC proposal, all qualified marginalized households consuming 50 kilowatt-hours (kWh) or less would get a 100-percent discount on their electricity bills.

Similarly, qualified Pantawid Pamilyang Pilipino Program (4Ps) beneficiaries with accounts in their distribution utilities will automatically be enrolled in the lifeline subsidy program and receive a full discount.

To fund the program, however, all other subsidizing electricity consumers would be charged a uniform rate of P0.01 per kWh.

The ERC said under the proposal, distribution utilities, retail electricity suppliers and the National Grid Corp. of the Philippines would collect the fees and remit these to the state-run Power Sector Assets and Liabilities Management Corp.

All proceeds will go to the proposed national lifeline subsidy fund, which will cover the discounts granted by distribution utilities to eligible beneficiaries.

The lifeline rate is a subsidized rate given to qualified low-income electricity consumers who have difficulty paying their power bills at full cost.

Under the existing rules, only 4Ps beneficiaries and households classified as living below the poverty threshold set by the Philippine Statistics Authority may avail themselves of the subsidy.

Power utility giant Manila Electric Co. (Meralco), which serves Metro Manila and nearby provinces, currently offers the highest threshold for lifeline rate consumption to qualify for a 100-percent discount.

In Meralco’s franchise area, qualified end-users consuming 20 kWh or less are entitled to a full discount on the sum of generation, transmission, system loss, distribution, supply and metering charges, as well as other fees.

Meanwhile, a 50 percent discount is offered for consumption between 21 and 50 kWh, 35 percent for 51 to 70 kWh and 20 percent for 71 to 100 kWh.

Although the lifeline rate program is considered “socially necessary,” consumer group National Association of Electricity Consumers for Reforms Inc. (Nasecore) argued that expanding its coverage would place an additional financial burden on working-class families.

“Instead of layering subsidies on top of a broken system, ERC should first fix the system itself by enforcing equity and cost-of-service principles across all consumer classes,” Nasecore president Pete Ilagan said in a position paper obtained by The STAR.

“Continuing to rely on the lifeline program to mask unfair pricing perpetuates dependence on cross-subsidies and hides inefficiencies while punishing millions of non-lifeline households who dutifully pay but receive no protection,” Ilagan said.

ERC chairman and CEO Francis Saturnino Juan said the commission would conduct a public consultation to solicit comments and insights on the move from all stakeholders.

“This participatory approach ensures that the proposed uniform national lifeline subsidy framework is not only aligned with the law but is fair, transparent and responsive to the needs of the marginalized electricity consumers,” Juan said.