The Renewable Energy Law (R.A. 9513) is not something people or even law experts are talking about. First, because some might consider it insignificant. Second, others perceive it as a good law because it was enacted in response to the threat of global warming and climate change. What could possibly be wrong in a law which aims to avert a global problem? As has been discussed last issue, RA 9513 aims to encourage investors and developers to put up power plants using renewable energy sources by granting financial benefits. This however is at the expense of local government units most especially the host communities.
Real Property Tax is Lowered
The taxes on real properties including machineries used for the generation of electricity using renewable sources “shall not exceed one and a half percent (1.5%) of their original cost less accumulated normal depreciation or net book value”. To place such limit on the real property tax to be collected by local governments will greatly affect the special education fund which is used by the local school board for extension classes of schools of the province and the municipality concerned. This will also greatly decrease the funds from real property taxes for the municipality and the province.
National Wealth Drops
Section 291 of the Local Government Code provides that local government units are entitled to a share in the utilization of national wealth within their territorial jurisdiction. The rate which applies before 9513 is 1% of the gross sales of the energy producer but now it is 1% of the gross income which will result in a reduction of more than half of the original share. For example, a local government’s share of more or less 15 million pesos every year will now be reduced to just 4.9 million pesos under the new law. The reduction is the result of the new rate and the fact that the national government gets 60% of the proceeds and the remaining 40% goes to the host community. What has the host communities done to deserve this?
80% of national wealth share which is now known as government share is intended to lower the cost of electricity of the host community and the remaining 20% may be allocated for development and livelihood projects. The new provision on the use of the 80% is somewhat absurd if not cruel. Said 80% shall be utilised to “subsidize the electricity consumption of end-users in the RE host communities/LGUs whose monthly consumption does not exceed one hundred kilowatt-hours (100kWh)”. Again, what have host communities done to deserve this cruelty? Under the new rule the consumption of person who consumes 100kWh or less of electricity per month will be subsidized but if for the following month his consumption reaches 101kWh he will not be entitled to any subsidy! I see no sensible justification for this. Now, consumers within host communities must have to watch their electric meters and never let it go past 100kWh per month otherwise: “No subsidy!” This subsidy is supposed to compensate host communities for the disruption and destruction they suffered with the putting up of the power plant. The new law has turned this power subsidy into a game. Local governments allot a fixed amount for each consumer for each month and if his kWh consumption exceeds the allotted amount, he pays the excess. This will have to change to conform to this absurd and cruel new rule.
At present, local governments will have to think twice before allowing power plants to operate in their jurisdiction. The reduction of the benefits intended for them is unjustified and insensitive. Yes, developers might be enticed to put up plants using renewable sources but how about the local governments? Can they be convinced to allow the plants to operate in their jurisdictions now that their benefits have been dramatically reduced? Something has to be done about this law. An amendment to bring back the decreased benefits to host communities might be an honourable act for a lawmaker to consider, rather than allow this law to further fatten the pockets of developers and investors.