Electricity bills to rise in March

By: Ronnel W. Domingo - @inquirerdotnet Philippine Daily Inquirer
February 10, 2018

Manila Electric Co. yesterday said it would implement an increase of 75 centavos out of the P1.08-per-kilowatt-hour (kWh) increase announced earlier for the February billing period.

Meralco said in a statement the remaining 33 centavos would be carried in the following billing period in March, along with whatever rate adjustment there would be for that month.

“The full increase was not implemented to cushion the impact of higher electricity rates on consumers, cognizant of the fact that there were recent price increases on fuel and other basic commodities,” the company said.

For this month’s rate increase, to be reflected in customers’ March bills, residential consumers that use up 200 kWh would see an additional P150 compared to the previous monthly bill.

Meralco’s overall rate went down to P9.47 a kWh this month from P8.72 in January.

The latest rate adjustment was mainly due to an 84.69-centavo-per-kWh increase in the overall generation charge.

The distribution giant said that of such amount, it would reflect 57.80 per kWh this February, with the generation charge going up to P4.6548 per kWh from P4.0768 in January.


“The difference shall be implemented in the March bill,” the company said.

“After the reduction in PSA (power supply agreement) charges reflected in January due to the early completion of annual capacity fee payments for the previous year, capacity fees returned to levels prescribed in the PSAs,” it added.

According to Meralco, suppliers with which the distribution giant has long-term PSAs—particularly suppliers that run the Pagbilao and Ilijan power plants—effected a P1.7607-per-kWh increase in rates, which have “return[ed] to normal levels.”

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DOE KEEPS TRACK OF POWER PLANT SHUTDOWNS FOR SUMMER

To avoid straining power supply during the critical summer months, the Department of Energy (DOE) is also monitoring the shutdowns of power plants relative to their regular maintenance schedules.

Energy Secretary Alfonso G. Cusi indicated that they are steering clear of a situation wherein more power plants will be taken off the power system, especially if the generating facilities without certificates of compliance (COCs) would not all offer their capacities via the Wholesale Electricity Spot Market.

“We are plotting the schedule of power plants that will be on regular maintenance shutdown because they will have impact on supply also,” the energy chief said.

Even with oversupply in capacity, if plant shutdowns are not properly managed and coordinated, such could still drive the power system into breaking point – and will in turn trigger unwanted electricity service interruptions.

Cusi qualified that “the ERC is working, but there are things needing its action as a collegial body,” including the required permits-to-operate or COCs of power generating facilities.

Like all stakeholders in the power industry, Cusi is also hopeful that the distressing leadership black hole at the ERC will finally be resolved.

Last week, the Philippine Independent Power Producers Association, Inc. (PIPPA) had already elevated its plea to President Rodrigo Duterte on the immediate need to restore normalcy at the ERC.

The organization of power generators in the country had stated that “the energy industry needs a fully functional Commission in order to effectively implement their mandate in accordance with EPIRA (Electric Power Industry Reform Act).”

PIPPA added “without a working Commission and putting a pause on the important work of the ERC, we will find ourselves without the needed approvals for PSAs (power supply agreements), connection agreements, price determination regulation, compliance certificates and licenses.”

As of last week, it was gathered from sources in Malacanang that Davao-based lawyer Alexis Lumbatan is seriously being considered for acting Commissioner appointment at the ERC,

Lumbatan is not entirely new in public view, because he was touted as “the funny guy” in President Rodrigo Duterte’s inauguration in 2016 – which circulated then in social media posts. Lumbatan also worked previously as chief of staff to Presidential son Paolo Duterte in Davao City.

Once his appointment is firmed up in the Palace, his papers would have to be transmitted to the Office of ERC Chairperson Agnes Devanadera, so he can take over in his temporary post at the regulatory body.

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Reference:

Velasco, M. M. (February 4, 2018). DOE keeps track of power plant shutdowns for summer. Manila Bulletin.

Hike in Coal Excise Tax to trigger spikes in power rates

The proposed three tiered increment in excise tax for coal as fuel for power generation was objected to because of anticipated spikes that such could trigger on the electric bills of consumers.

This was rationally raised by Senate Committee on Energy Chairman Sherwin T. Gatchalian on his manifestation of opposition to the increases in coal excise tax to be enforced on “staggered basis” of R100, then R200 and later on at R300 per metric ton as propounded under the Tax Reform for Acceleration and Inclusion (TRAIN) Bill. That will be tranches of increases from currently at R10 per metric ton.

Spikes in electricity rates due to the tax imposition, the senator added, would be unavoidable for Filipino consumers because 50 percent of the country’s electricity supply relies on coal-fed power generation.

The lawmaker said “the impact of R100 increase in excise tax on coal will be R4.70 increase in the bill of an average consumer consuming 200 kilowatthours (kWh) every month.”

At R200 excise tax, the cost impact will roughly double to R9.57 for the same consumption bracket of consumers; and at R300 excise tax, it will be a higher cost burden of R14.35.

Gatchalian coherently stated “the proposal on increasing the excise tax on coal seems sound if it will reduce carbon emissions in our country, but since this is a pass-on charge, there is no incentive for the coal companies or the coal power producers to reduce the consumption of coal because this will just be passed on to the consumers.”

It is worth noting that close to 60 percent of the rate component in the electric bill accounts for the generation charge – wherein the fuel for power generation such as coal, gobbles up bulk of the cost.

The lawmaker’s lament is anchored on the fact that “the consumers basically have no choice but to accept what is being billed to them every month.”

Beyond “financial distress” it will have on households, Gatchalian similarly warned on probable “repulsive effect on investments” when industrial users of electricity would be hit.

He stressed that industries may equally suffer as they are “going to be burdened directly by the increase in excise tax on coal.”

Reference:

Velasco, M. M. (November 29, 2017). Hike in coal excise tax to trigger spikes in power rates. Manila Bulletin. Retrieved from https://www.pressreader.com/philippines/manila-bulletin/20171129/281973197970711