MANILA, Philippines -- The Lopez-owned First Gas Power Corp. has told the House committee on energy that the government?s tax policy on fuels for energy generation may also be blamed for the high cost of electricity in the country.

Richard Tantoco, First gas executive vice president, said the government collects P2 for every kilowatt hour of electricity generated by natural gas plants such as those that it owns and operates.

Tantoco told the energy panel chaired by Pampanga Representative Juan Miguel Arroyo, son of President Gloria Macapagal-Arroyo, that the government collects royalty amounting to P1.80 for every kilowatt hour of electricity generated by natural gas plants.

He added that the government also collects a value added tax of 12 percent ?which becomes a tax on tax.?

?This adds another P0.21 to the P1.80 royalty tax on natural gas, bringing the total government take to over P2.00 per kilowatt hour,? Tantoco told the lawmakers.

?The Filipino consumer has always been told that the price of their electricity is one of the highest in Asia. What they have not been told is that the taxes on their fuel are also the highest in Asia,? he added.

Tantoco said Indonesia, Malaysia and Thailand have hardly any royalty or tax on indigenous fuel sold in their countries. He said some even subsidize the consumption of local fuels.

Tantoco said the increases in the cost of generation lie with the cost of fuel including the royalties.

?The capacity fees collected by First Gas have remained flat except for very small annual CPI adjustments for operations and maintenance,? Tantoco said, showing a graph to make his point.

The First Gas executive also said that 40 percent of the price of natural gas was indexed to the world market price of oil. As a result, Tantoco said, the gas payments have gone way up by 125 percent.

?When the First gas contracts were approved by the Energy Regulatory Board in 1997, the levelized price of First Gas was P2.47 per kilowatt hour, lower than the Natonal Power Corp?s effective price of P3.71 per kilowatt hour,? Tantoco said.

?But then oil was selling at $17 a barrel. Today, oil has reached a price of around $130 a barrel. Because about 40 percent of the natural gas price is indexed to the world market price of oil, the gas payments of natural gas plants have gone way up by 125 percent,? he added.

Camarines Sur Representative Luis Villafuerte on Friday continued his criticism of Lopez-controlled firms First Gas and Meralco for insisting that their transactions were aboveboard despite his allegation that Meralco paid P13 billion for undelivered power from First Gas.

First Gas and Meralco executives said the payments and the passed-on cost to the Meralco consumers were legal as they were covered by the ?take-or-pay? provision of their contract.

?In essence, whenever the power generation company such as First Gas could not and did not deliver to the distributing company the 1,000 megawatts of electricity, Meralco had nothing to take and therefore had nothing to pay,? Villafuerte said.

?If nothing was taken, then it is very clear that nothing should be paid,? he added.

Villafuerte also expressed disgust at First Gas executives? attempt to pass the blame to the National Power Corp. for the 1,000 megawatts that the lawmaker said First Gas could not and did not deliver.

He added that the excuse of First Gas that they could have delivered the power but could not do so because of Napocor?s allegedly inadequate transmission lines was belied by Napocor President Cyril del Callar during the congressional inquiry.

Del Callar said that ?there was no firm commitment on the part of Napocor that it should provide the transmission line at the time.?