Business

Electric co-op rates up as firms forced to buy more expensive power

The power supply shortage that has triggered rotational brownouts in Luzon in recent weeks jacked up electricity costs for residential customers of electric cooperatives by an average of P1.30 per kilowatt-hour in June alone.

“Distribution utilities needed to buy electricity from the Wholesale Electricity Spot Market (WESM) to address these power outages, and in most cases, electricity from the market is more expensive than the supply sourced through contracts with generation companies,” said Kenjie Fagyan, Philippine Rural Electric Cooperatives Association (Philreca) regulatory affairs officer, in a statement.

Philreca said 26 or about three in every five of its members in Luzon confirmed that the rates rose due to the supply shortage.

Fagyan noted some power plants have been on forced outage since December 2020 due to unfinished maintenance or repairs. Residential rates have been increasing steadily since January, and the increase in June was the biggest, he added.

Philreca president Presley C. De Jesus reiterated his call for the regulatory and policy agencies to stop finger-pointing and find a way to solve the problem.

“The people are suffering because of someone or some office’s failure to plan and make contingencies on such a perennial problem like this one,” De Jesus said.

“What puzzles me is the fact that we know what the problem is, we know what the solution is, and in fact, we even know when exactly the problem would occur. (But) nothing is being done to solve this,” he said.

The Department of Energy (DoE) had insisted there was enough energy supply and that the National Grid Corp. of the Philippines’ (NGCP) only needed to contract generating capacity.

Countering the DoE, NGCP maintained there was not enough supply to be contracted for reserves and that the DOE’s policy would make electricity more expensive.

Still, the grid operator had announced it was preparing for the conduct of competitive bidding for ancillary services contracts with power generators.

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