RP power rates improve from 6th to 7th highest in Asia

The cost of electricity in the country slightly improved from being the sixth highest in Asia to seventh overall, Energy Secretary Vincent S. Perez reported recently.

Simulations made by the Department of Energy (DOE) showed that Japan still ranks highest in terms of electricity rates in the residential sector and second both in the commercial and industrial sectors.

Cambodia has the second most expensive power rates in the residential sector followed by Hong Kong, Brunei, Singapore, Malaysia and the Philippines.

Last year, when the government unveiled its 10-point plan to reduce electricity rates, the Philippines was sixth highest among Asian countries in power costs in the residential sector.

The government has adopted several measures to lower the cost of electricity, noting that the high cost of power is deterring the entry of new investments.

The Electric Power Industry Reform Act (EPIRA) of 2001 for instance, mandated a 30-centavo per kilowatt hour (kwh) reduction in electricity rates for residential consumers nationwide.

The Energy Regulatory Commission (ERC) has also approved the petitions of electric cooperatives for loan condonation. This resulted in the lowering of power costs in the provinces to a much as 76-centavo/kwh.

The review of the National Power Corp.’s (Napocor) contracts with the independent power producers (IPPs), resulting in savings of about $834.3 million, has also contributed to the decrease in power rates.

The settlement agreement reached by Napocor and the Manila Electric Co. (Meralco) over their 10-year power supply contract signed in 1994 will also lead to lower power rates by 12-centavo/kwh in Metro Manila and nearby provinces.

The ERC has also approved Napocor and Meralco’s petitions for pricing incentives to large industrial and commercial industries.

Under the Special Program to Enhance Electricity Demand (SPEED) program, Napocor started giving price discounts to its industrial and commercial customers in October last year.

Qualified industrial and commercial customers in the Luzon grid received fixed discounts of 80-centavo/ kwh. Big customers in the Cebu-Negros grid were given 70-centavo/ kwh and 10-centavo/ kwh in the Mindanao grid.

The ERC has also given Meralco the go-signal to implement the SPEED program within its franchise area. Meralco commercial and industrial customers will be given a 12-centavo/ kwh discount.

About 224 industrial customers in the Meralco franchise area using 1,000 kilowatts per month will benefit from the initial implementation of the SPEED program. The second phase of the SPEED program will give discounts to another 1,148 industrial and commercial customers using at least 500 kilowatts a month.

At the same time, ERC has authorized the National Transmission Corp. (TransCo) to implement its Transmission Incentive Program (TIP). Under TIP, a fixed discount rate of 10-centavo/ kwh will be given to customers that avail of the SPEED program.

"The government is doing all its can to reduce the cost of power and in the process lower the cost of doing business in the country. We are hopeful that in the right time we will see efficient and reliable delivery of power at reasonable costs," Perez said.