High generation cost triggers power rate hike in W. Visayas

SunStar Business
SunStar Business

ILOILO CITY – Electric cooperatives in Western Visayas have attributed the increased electricity rate as reflected in their May 2024 billing to the “significant rise in generation cost at the Wholesale Electricity Spot Market (WESM).”

“To meet our energy demands, we rely primarily on our contracted power suppliers. And supplement our remaining power supply by sourcing additional power from WESM,” Shirley Laurente, president of the Electric Cooperatives Association of Region VI, Inc. (ECAR-VI) said during a press conference Monday.

Laurente said the generation charge in May 2024 bills has surged from April 2024, directly impacting overall electricity rates.

“The increase is a pass-on charge, which means that once collected, it will be remitted directly to power suppliers,” she said.

Lawyer Janeene Depay-Colingan, executive director/general manager of the Philippine Rural Electric Cooperatives Association, Inc. (PHILRECA), said residential rates in Western Visayas for May incurred a 16.57 percent increase compared with the previous billing month.

The residential effective rate in May was PHP15.56 per kWh from PHP13.378 per kWh in April.

Electric cooperatives in Western Visayas, as well as in other parts of Visayas, resorted to WESM due to the shutdown of geothermal power plants since April that caused thinning reserves, the shutdown of six power plants due to mechanical equipment failure, and high heat indices and increased consumer demands.

Lawyer James Balsomo, general manager of the Iloilo III Electric Cooperative (ILECO III), said the drastic increase in one month is extraordinary.

He cited, for instance, the consumption of the franchise area of ILECO III that rose to 16,762,285 kilowatt-hours in April from 13,619,114 kilowatt-hours in March.

“This is just temporary. As soon as the weather starts to normalize, our consumption, the demand side would also start to normalize. And by then, our market situation would start to normalize,” he added.

To address the concern, PHILRECA has proposed short-term solutions to include fast-tracking the approval of the provisional authority of electric cooperatives to enter into emergency power supply agreement and expedite the approval of plant application of generation companies, including those that intend to develop renewable energy facilities. (PNA)

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