Power rates to hike if ‘quick fixes’ begin

POWER rates can rise up to P15 to P19 per kilowatt hour once emergency power "quick fixes" begin to operate, an executive of the National Grid Corporation of the Philippines (NGCP) says.

"We need these quick fixes (generator sets) because building a power plant will take as long as four to five years. We have two choices: cheaper power now but it's not enough or expensive power but there will be a supply. We have come to a point where we need to choose," NGCP regional corporate executive Edgardo Calabio said.

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Calabio said the P15-P19 will be the probable power rate hike once generator sets begin to operate.

This rate is far higher than the Luzon rate, which is supposed to be the most expensive to date in the Philippines.

"These are coming from the proponent of those generator sets. Ito yung rate nila. But this won't be outright P15 to P19 because you will still have to mix the power with the other sources. Posibleng mas mababa pa rito. How they will charge it will still also have to undergo negotiation," Calabio said in an interview Wednesday at the Philippine Information Agency-Davao Region.

"But it's another story if you should like to contract outright to the supplier. If generator sets are contracted by the government, hire these equipment then the NPC (National Power Corporation) will have to mix the power with plants. This will absorb some of the rates," Calabio said.

Calabio said Luzon currently has an average power rate of P9.50 per kilowatt hour, P7.50 for Visayas and P6.50 for Mindanao.

"Mindanao has lower rates because there are more hydro plants here, but the lower rate is both a blessing and a curse. Blessing for the consumers but if you want investors to come in then they'd be discouraged. We have to look at the usual business practice. They want a reasonable return but the thing in Mindanao is not ideal for people to come in. There are more players in Luzon. In Mindanao we have none. Our rates are not competitive.”

Calabio also expressed confidence that power investors can prove their rates.

Calabio also made a projection that power generation in the country will return to normalcy by January.

"What we were thinking is if the generator sets will come around August, and then maybe the hydro facility can operate by November or December then we could normalize a bit. Normalize in a sense that there will no longer be brownouts," he said.

Calabio said talks are currently done in Malacañang on what resolutions can be made on the Mindanao power crisis.