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THE
Philippine Electricity Market Corp. (PEMC) reported that
intermittent operation and high demand for power supply
from coal-fired power plants have pushed up prices at
the Wholesale Electricity Spot Market (WESM).
The PEMC
said the WESM’s final prices for the period covering
February 26 to March 25 showed an average market price
or effective settlement price (ESP) of
P6.72/kilowatt-hour (kWh), higher than the previous
month’s ESP of P5.73/kWh.
The
Manila Electric Co. (Meralco) spot purchases of
electricity averaged P8.94/kWh, which is significantly
higher than the WESM average for this month.
During
this period, Meralco was mostly buying during the peak
hours when electricity prices were high. Furthermore,
Meralco purchased only 8.07 percent of its total demand
from the WESM.
The
higher prices for March were driven by the increase in
temperature that, in turn, pressed users to use more
power and use their air conditioners longer.
“Just
like any market, prices change depending on supply and
demand, and with the onset of summer, increased
temperature causes us to use more electricity which
results in higher spot prices,” explained Lasse
Holopainen, president of PEMC.
Besides
the increase in temperature, there was also a marked
decline in power availability from coal plants, to
21.3-percent output in March from 29.9 percent in
February. Calaca and Masinloc were down and others were
on intermittent outage during this period as well.
“When
the cheaper generators are not available, the prices
rise as well [since] we are forced to dispatch more
expensive plants,” said Holopainen.
In any
case, the electricity consumer group EmPOWER Consumers
on Thursday urged the Energy Regulatory Commission (ERC)
and industry players to explain the sharp increase in
electricity rates this month.
On
Tuesday Meralco announced an adjustment in its
electricity charges this month of P0.5188 per
kilowatt-hour (kWh) in generation, P0.30/kWh in
distribution, P0.0759/kWh in transmission, and
P0.0770/kWh in system-loss charge.
Milo
Tanchuling, secretary-general of Freedom from Debt
Coalition and convenor of EmPOWER Consumers, said in a
letter to the ERC dated April 23 that the recent news on
increase in electricity charges in Meralco franchise
areas is contrary to ERC’s statement early this month
that there will be no power rate increase in the next
two months.
The
consumer alliance recalled as well President Arroyo’s
statement at the Philippine Energy Summit early this
year that her administration will find ways to reduce
electricity rates in the country—with the situation now,
that remark seems but an empty promise, the alliance
added.
“In this
time of food/rice crisis, when the value of people’s
money continues to diminish, a P150-monthly increase in
electricity bill further aggravates the miserable state
of the Filipinos, especially the poor. The government is
accountable to the people, thus it owes us consumers an
explanation for the increase in electricity charges,”
wrote Tanchuling to the ERC.
At the
Senate, Minority Leader Aquilino Pimentel Jr. also
wanted an explanation and prodded the Committee on
Energy to look into the reasons the Meralco increased
electric charges.
In a
statement, Pimentel acknowledged that Meralco’s latest
rate increases may be justified if one looks only at the
rising cost of crude oil which is hitting $120 per
barrel but pointed out “there is also Section 23 of
Epira (Electric Power Industry Reform Act) that
obligates electric distribution utilities to supply
electricity at the least cost to their so-called captive
market.”
“It may
be true that Meralco’s buying electric power from
National Power Corp. and Wholesale Electricity Spot
Market may be more costly than buying it from
independent power producers [IPPs] like the Sta. Rita
and San Lorenzo power plants,” he said. “The problem,
however, is that if Meralco buys electricity from those
IPPs, it may be cross-subsidizing them as these IPPs are
reportedly owned partially, if not fully, by Meralco.
That would, in effect, violate the principle that a firm
that distributes electricity may not also produce it.”
Pimentel
insisted there is an urgent need for Congress to review
the Epira law to spare consumers from the spiraling cost
of electric power by some legal device like mandating
Napocor to impose its rate-reduction powers on power
distributors in times of emergency. |
