DOE: Philippines power rates now highest in SEA

MANILA, Philippines — The Philippines now has the most expensive electricity rates in Southeast Asia, the Department of Energy (DOE) said, with consumers facing potentially higher power bills next month amid rising fuel costs.

DOE Undersecretary Rowena Cristina Guevara said the country’s average power price reached P12.43 per kilowatt-hour in June, surpassing Singapore’s average rate by P0.09 per kWh.

Guevara attributed the higher electricity costs to continued supply constraints, particularly in the Visayas, where several power plant outages forced the usage of more expensive fuel.

“They have been under yellow alert almost all the time, and that is what is driving up electricity prices in the Visayas,” Guevara said yesterday.

Sustained high demand during summer months also prompted the dispatch of more costly power plants to help prevent blackouts, she added.

The impact was most evident in the Visayas, with Southern Leyte Electric Cooperative posting the country’s highest on-grid residential rate at P16.57 per kWh in June, DOE data showed.

Power giant Meralco, which serves customers in Metro Manila and nearby provinces, recorded one of the country’s highest rates at P14.48 per kWh during the month.

In off-grid areas heavily relying on oil-based generating facilities, Busuanga Island Electric Cooperative had the most expensive residential rate at P24.92 per kWh.

With fuel costs continuing to rise amid renewed Middle East tensions, Guevara warned that electricity rates could climb further next month.

“Depending on the price increase of fuel in the next few weeks, we might see an increase in the price of electricity,” she noted.

This week, the DOE announced maximum price hikes of P10.68 per liter for diesel, P11.77 per liter for kerosene and P3.65 per liter for gasoline.

Power utilities have been encouraged to prioritize the use of cheaper fuel sources before turning to more expensive alternatives.

Energy Secretary Sharon Garin has pushed for demand-side management, urging consumers to manage their electricity use to help ease pressure on the power supply.

“We can also control the price of electricity depending on our consumption. If we consume less, the electric cooperatives will not be forced to use the more expensive (fuel),” Garin said.

The Energy Regulatory Commission (ERC) has extended the no-disconnection policy for unpaid electricity bills until October.

Power utilities are ordered to implement staggered or deferred payment schemes to ease the financial pressure on consumers.

“Preventing service disconnections is a necessary humanitarian measure, but it is merely a temporary fix, not a solution to the country’s power affordability crisis,” said Gerry Arances, convenor of consumer group Power for People Coalition.

Pass-through charges

Sen. Risa Hontiveros is seeking a review of the ERC’s automatic pass-through mechanism, saying electricity charges should first be examined by regulators before they are collected from consumers.

The current system allows distribution utilities to automatically recover pass-through charges, including generation costs affected by fuel price fluctuations, before the ERC completes its review, she said.

“Review first, collect later. Every centavo charged to consumers should first be justified and explained before it is passed on to them,” Hontiveros stressed.

Under the Electric Power Industry Reform Act, generation, transmission, distribution and other eligible expenses are recoverable costs regulated by the ERC.

Existing rules, however, allow distribution utilities to automatically collect pass-through charges and remit them to power suppliers.

Hontiveros said generation, transmission and system-loss charges account for about 77 percent of residential electricity bills.

She warned that the automatic pass-through system could reduce the incentive of power companies to secure cheaper electricity because higher costs can be passed on to consumers.

Her call came after the National Grid Corp. of the Philippines announced an increase of P0.77 per kWh in transmission charges, following an earlier increase of P0.34 per kWh in Meralco’s generation charge.

According to Hontiveros, the combined adjustments would raise the monthly electricity bill of a household consuming 200 kWh by about P222.

The increase would offset much of the daily wage increase of P60 that minimum wage earners in Metro Manila will receive beginning July 25, she said. — Mark Ernest Villeza