ILOILO City – In the Visayas, the average power rate for residential consumers is P18 per kilowatt-hour (kWh).
There has been an increase of around P5 per kWh since February this year due to the continuing oil price hikes and weakening of the peso against the dollar.
This southern city’s sole power distributor, MORE Electric and Power Corporation (MORE Power) which had the lowest power rate in the country in previous months, was not also spared from this. Yesterday, it announced an increase in its power rate by P3.34 more per kWh this September.
From P9.14 per kWh in the previous month, the rate for September billing would already be P12.48 per kWh.
Despite this, however, MORE Power remains to have one of lowest power rates in the Visayas, if not in the whole country, based on the latest available and published rates of private distribution utilities and electric cooperatives in the Visayas (from highest to lowest):
* NORECO 1 in Negros Oriental – P 18.11
* NORECO 2 in Negros Oriental – P17.84
* BOHECO in Bohol – P17.2086
* LEYECO V in Ormoc City – P17.03
* ANTECO in Antique – P16.19
* CENECO in Bacolod City – P15.39
* VECO in Cebu City – P15.37
* AKELCO in Aklan – P15.11
* NOCECO in Negros Occidental – P14.97
* ILECO 2 in Iloilo – P14.90
* ILECO 3 in Iloilo – P14.61
* CAPELCO in Capiz – P14.60
* ILECO 1 in Iloilo – P13.46
* MORE in Iloilo City – P12.48
* GUIMELCO in Guimaras – P12.17.
The increase in power rates is mainly due to the high coal prices in the global market coupled with the weakening of the peso against the dollar.
In the last quarter of 2021, the price of the coal was at an average 60 US dollars per metric ton. But at the onset of 2022, the price started to surge; it is now at US$404 per metric ton—five times higher or 575 percent up.
The triggers are the halt in coal exportation from other countries and Russia’s invasion of Ukraine which is one of the world’s largest suppliers of coal.
It can be noted that most of the distribution utilities in the country have already procured and got supply contracts with coal-fired power plants being one of the cheapest, reliable, and with huge availability of supply before.
Around 50 to 70 percent of the procured electricity of the distribution utilities are sourced from coal-fired power plants.
This explains why there is an increase in generation cost following the fuel price hike. Because the generation cost is a “pass through” charge in distribution utilities, it is eventually passed on to the end-users – the consumers.
This means further that when the power is procured cheap by the distribution utility, consumers will also get a cheap “pass on”. But because of the prices increase, the “pass on” charge also increases.
In its official statement, MORE Power said the increase is also following the end of their power supply contract with the Power Sector Assets and Liabilities Management (PSALM) Corporation, a wholly-owned and -controlled government entity.
In the last 14 months, MORE Power consumers enjoyed a lower generation rate as a result of the company’s efforts to source the most cost-effective power generation supply.
This was realized with MORE Power’s power supply contract with PSALM Corporation, which has an average Time-of-Use rate of P3.6 per kWh.
However, it added that PSALM could not supply the long-term power requirements of MORE because the contract of PSALM with Unified Leyte Geothermal Power Plant, where PSALM sourced its power, already ended.
With this, MORE had to undertake the Department of Energy mandated Competitive Selection Process (CSP), or in ordinary parlance, competitive bidding, among generation companies to secure the least costly power supply.
MORE Power noted that at the time of CSP, coal-fired power plants provided the lowest rate of MORE at only P2.91 per kWh – lower than PSALM’s P3.6 per kWh, with a coal price of only 60 USD/MT at that time. Unfortunately, coal prices surged from the last quarter of 2021 until today, with an average price of 405 USD/MT.
The increase in rate will be felt by consumers mainly because of this increase in the generation charges of the power suppliers of MORE Power.
Meanwhile, prices in the Wholesale Electricity Spot Market (WESM) remained elevated with this month’s average nodal price of P8 per kWh.
MORE Power emphasized that generation and transmission charges are “pass through” and are paid to power suppliers and the grid operator, respectively.
MORE Power assured consumers it is doing everything to lower its kWh rate and will continue to find ways to temper the increase in blended generation cost passed on to the consumers.
Along with this is the assurance that they will continue cost-efficient and good services to the Ilonggos./PN
