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HOUSEHOLDS may expect a little relief from having to pay
for high electricity prices this month, as power rates
at the Wholesale Electricity Spot Market (WESM)
significantly dropped last month owing to high
availability of hydroelectric power plants and
lower-than-expected demand.
In a
press conference, Lasse Holopainen, president of the
Philippine Electricity Market Corp. (PEMC), said the
effective settlement price for the April 27-May 26
period was P1.80 per kilowatt-hour (kWh). The reduced
prices should be reflected in the June billing of
customers of distribution utilities and suppliers who
are participating in the power market, he added. He is
optimistic the price reduction could be maintained in
the next few months. “We’re very careful about any
[change] more than a week forward, but the last couple
of weeks have been maintained, though it may be higher,
but not as much as old high levels,” said Holopainen.
“This is significantly below the P5/kWh that we were
averaging before this, and certainly unexpected for what
was supposed to be a peak price month,” the PEMC
official said.
Holopainen admitted they still need to figure out
everything, but a definite factor was that the industry
was geared up for high demand and low hydro
availability—which was the opposite of what happened.
The average demand, according to him, dropped by 4.07
percent to 5,035 megawatts (MW) from 5,249 MW last year;
average supply offers increased by 10 percent to 6,344
MW this year from 5,766 MW last year, and this, along
with high plant availability, contributed to the
low-price outcome.
The
hydroelectric plants’ contribution to the
power-generation mix increased from 5.1 percent a year
ago to 12.1 percent this year while diesel and oil-based
plants only contributed 0.9 percent, down from 2.8
percent in the same month last year.
“The
average generation offers were significantly higher than
last year’s, which translated to a higher supply margin
over the lower-than-expected demand, meaning that the
peak did not occur in May, as it did in previous years,”
said Mario Pangilinan, head for PEMC market operations.
Depending on weather conditions, WESM anticipates the
annual peak demand to occur in June or early July, so it
remains uncertain whether these prices will continue
into June. Everything went right with the system,
Holopainen said; there was sufficient capacity offered,
for which the traders and the rest of the industry
should be commended. “We don’t know for certain how much
longer these low prices will last, but let us enjoy it
while it does. About 11 percent of total demand for the
month was bought at the spot price.” |
