“In determining if rates are high or low, you have to factor in a lot of things. There is the generation charge, transmission charge and distribution charge so we have to see the issue on rates and apply a holistic approach and we need not just one but five measures to address the issue on rates,” Almendras said.
In a Senate hearing on the Department of Energy’s (DOE) budget, Almendras underscored the government’s plans to ensure there is adequate power supply and measures how to mitigate the adverse impact of increasing electricity prices.
He emphasized the need for baseload power plant in the country, which include the need for appropriate baseload technologies, as well as the expertise to apply it to the local power setup in the country.
“We are using nonbaseload technologies for baseload demands. Right now, the baseload applicable for us is coal, and as much as I have been criticized, we really need it right now.” Almendras said.
He added that the energy department is reviewing bilateral contract structures that will establish a reward system for more efficient generators.
Almendras said it is envisioned that the rewards to the generators will eventually be shared and translated to savings for its customers.
Almendras said there is also a need for the continued attention to the wholesale electricity spot market (WESM) to ensure that prices are appropriate for the situation.
“There is also a need for a reformat of the WESM. Thus, transforming it to an independent market,” he said.
Almendras said power rates at the WESM have been significantly lower this year compared to last year.
He said the DOE is reviewing the applications for universal charge and the possible strategies to mitigate its effects.
“I think people only see the news on universal charge applications which is why they think that power rates have been going up. The problem is, the filing of such applications are in the law but that does not mean that we are not doing anything about it. We have been doing a lot of things to ensure that the filing will not have a big effect on consumers,” he added.
Almendras said the DOE has been reviewing and pushing for the rationalization of the universal charge filings for missionary electrification to ensure that the fund will be used efficiently to provide power to those who still do not have electricity.
He added that the DOE is now hastening the privatization of small power utilities group and is ensuring that the areas are utilizing the most efficient technology toward lower charges.
Almendras underscored the DOE’s efforts in addressing the challenge in the power-distribution sector, particularly the electric cooperatives.
He said the DOE is pushing for the amendment of the National Electrification Administration Charter to have efficiency in the operations of the electric cooperatives nationwide.
