Visayan Electric residential electricity rates increased sharply to a year-high P13.74 per kWh in June, up from P12.88/kWh in May, resulting in higher monthly bills for consumers.
The rate hike was driven by high generation charges from WESM prices, a depreciating Philippine Peso against the US Dollar, and rising global coal prices, which outweighed lower transmission charges.
To help lower household electricity use, Visayan Electric urges consumers to save energy, particularly during peak hours from 1 p.m. to 4 p.m. and 6 p.m. to 9 p.m.
RESIDENTIAL electricity rates for Visayan Electric customers have jumped sharply this June. The rate has climbed to P13.74 per kilowatt-hour (kWh), up from P12.88/kWh in May. This means families will see higher amounts on their monthly bills, especially after a period of high energy use.
This big increase comes after a very challenging month for the Visayas Grid. In May, electricity demand shot up while power reserves stayed low, causing several Yellow and Red Alert declarations. When the grid faces such tight supply, utilities have to buy more expensive power from the open market to keep the lights on.
Why are generation costs going up?
The main reason for the June rate hike is the surge in generation charges, which is the actual cost of producing electricity. Visayan Electric explained that these costs were heavily hit by high prices in the Wholesale Electricity Spot Market (WESM), where real-time power prices change every hour based on supply, demand and power plant shutdowns.
Other big economic factors also pushed production costs up.
“Generation costs were affected by higher prices in the Wholesale Electricity Spot Market, the continued depreciation of the Philippine Peso against the US Dollar and sustained increases in global fuel prices, particularly for coal which are used by most power suppliers,” reads a portion of the statement.
This massive jump in production costs completely wiped out savings from other parts of the bill. Even though the National Grid Corp. of the Philippines lowered transmission charges for June, it simply was not enough.
“While transmission charges registered a downward adjustment, transmission costs account for only one component of a customer's electricity bill. The reduction in transmission charges was outweighed by the increase in generation charges, which remain the largest component of the bill,” Visayan Electric said.
Highest rates of the year
The June rate is now the highest cost that consumers have faced so far this year. It is a big change from the steady prices seen at the very beginning of the year.
Residential rates started January at P12.79/kWh, dipped slightly to P12.38/kWh in February and P12.36/kWh in March, but then began a steady climb to P12.57/kWh in April and P12.88/kWh in May.
How you can save energy and lower your bill
To help families protect their household budgets, Visayan Electric is urging consumers to save energy, especially during peak hours from 1 p.m. to 4 p.m. and 6 p.m. to 9 p.m.
The utility recommends making simple daily adjustments to lower your total electricity use. You can save by setting air conditioners to an efficient 25 degrees Celsius, regularly cleaning appliance filters so they run smoothly and unplugging electronics and chargers when they are not being used. / DPC