Electricity bills to go up by 7.5¢/kwh

MANILA, Philippines - Electricity bills will go increase by up to 7.5 centavos per kilowatt-hour for every 300 megawatts of additional capacity tapped under the Interruptible Load Program (ILP), according to estimates by the Manila Electric Co. (Meralco).

The ILP, instead of leasing bunker-fired generators, is being considered to address a looming power crisis in the summer of 2015. Under the program, large energy users can use their own generators or sell their excess capacity to the grid.

Larry Fernandez, head of Meralco’s utility economics, said ILP participants would be de-loaded from the grid and generate their own power requirements.

ILP participants will be compensated by Meralco, which in turn will charge the cost to other electricity users.

“It’s 7.5-centavos per kwh rate impact on the generation charge per 300 MW de-loaded for five hours a day on all weekdays for one month. If only 200 MW is de-loaded for five hours, the rate impact would be around 5 centavos per kwh,” Fernandez said.

In yesterday’s hearing at the Senate, energy committee chairman Sen. Sergio Osmeña III hinted they might reject President Aquino’s request for special powers, considering that the additional capacity may be raised from the ILP.

He said he favors the ILP option instead of the government’s proposal to lease or purchase bunker-fired facilities.

“We’re not going to allow the government to interfere in free market play… We’re trying to play with the rules that Congress originally set in 2001. The moment we come in with political solutions, it becomes a disaster as far as the economics of the industry are concerned,” Osmeña said.

In a draft resolution submitted by Energy Secretary Carlos Jericho Petilla, he said there are several options to generate up to 300 MW in additional capacity. He cited the rental or purchase of generator sets, tax exemption to generation capacities and the ILP.

For the ILP, Petilla said participants would be reimbursed for their fuel expenses and use of their units.

Sought for comment on Osmeña’s position favoring ILP, Petilla said the government would work on all options.

“It is basically them who will decide. We will work on all options... The ILP might just work,” he said.

The government is looking at 271 MW under the ILP.

Petilla said the shortage in summer is now 900 MW from an earlier estimate of 800 MW due to a delay in the 150-MW coal fired power plant expansion in Calaca, Batangas. The date of completion has been pushed back from March 2015 to June 2015.

Conserve power

Meanwhile, the Department of Energy (DOE) appealed to consumers to conserve power.

“The DOE enjoins all electricity consuming sectors, particularly residential, industrial and commercial establishments including public facilities, operations of advertising billboards and all the electricity end users, to implement demand side management programs and other energy conservation measures to reduce the country’s demand for supply of electricity,” Petilla said in circular 2014-08-0014 dated Aug. 11 and published yesterday.

Under the circular, only hospitals, military installations, airports and similar entities could maintain the regular use of electricity.

Petilla also encouraged distribution utilities such as Meralco to implement demand-side management programs and other energy conservation measures.

He said government agencies and offices where adequate ventilation is available should discontinue the use of their air-conditioning units.

“In cases where aircon units are to be used, the thermostat shall be set to no lower than 25 degrees Celsius,” the circular stated.

Ernie Pantangco, chairman of the committee on energy of the Management Association of the Philippines, welcomed the proposed measures, saying everyone should work together to address the situation.