Electricity rates seen to rise in January
Filipino consumers need to tighten their belts starting January next year as electricity rates are expected to rise after the Energy Regulatory Commission (ERC) allowed power generators to recover a total of P3.05 billion.
The commission on Thursday announced its decision to approve the collection of the remaining 70-percent reserve trading amounts—nearly seven months after it had given its go signal for generators to regain a portion of the settlement, amounting to P1.72 billion.
To recall, the ERC suspended the settlement of amounts in the reserve market last March due to the spike in reserve costs, triggering increases in power bills.
For this fresh round of collection, a staggered payment over three months has been set for consumers in Luzon and Mindanao. Collection for those residing in the Visayas, meanwhile, would be stretched out to six months.
Higher impact in Luzon, Visayas
According to the ERC, the rate impact will be P0.124 per kilowatt-hour (kWh) for Luzon and Visayas. Mindanao will see a lower rate impact of P0.033 per kWh.
The ERC said the decision came after the Independent Electricity Market Operation of the Philippines (IEMOP) had submitted the recalculated amounts for the billing period February and March 2024.
“The IEMOP’s recalculated submission was based on the noncompliance data provided by NGCP (National Grid Corp. of the Philippines). As a result, the reserve trading amounts were further recalculated and, after deducting the values of the noncompliances, was reduced by P725 million,” the ERC said.
IEMOP serves as the operator of the Wholesale Electricity Spot Market (WESM), an avenue where power is traded between producers and distributors to boost their supply, with rates seen to be costlier during the hotter months. Power generation firms also sell their reserves in the “reserve market,” another platform integrated into the WESM.
Industry players tap or rely on reserves in case a large generating unit fails to run at full capacity.
Meanwhile, the average cost of power traded at the WESM ended slightly higher in November amid the lower supply margin, as well as the weaker contribution of coal in the electricity mix.
Based on data from IEMOP, average electricity spot price systemwide reached P4.42 per kWh during the period, up by 0.6 percent or 3 centavos from a month ago’s P4.39 per kWh.
Demand in November dropped by 2.2 percent to 13,659 megawatts (MW) from 13,972 MW. Supply recorded also went down by 2 percent to 19,492 MW against the previous 19,897 MW.
