Electric coops conduct bidding; consumers to pay less by 2019

CEBU, Philippines – Electricity consumers in Eastern Visayas may enjoy paying lesser in their bills by 2019 until 2038 with the reduced generation costs initiated by the electric cooperatives in the region. 

This after the GN Power Ltd. Co. of the Ayala Group won the bidding process yesterday at a headline price of P3.33 per kilowatt hour (kwh) in the generation component.

Representatives from electric cooperatives in Central Visayas such as Cebu Electric Cooperative (CEBECO), Bohol Electric Cooperative (BOHECO), and Camotes Electric Cooperative, Inc. (CELCO) were also present yesterday to observe the process.

Emmanuel Saño, president of the Federation of Rural Electric Cooperatives of Region 8, said the 11 electric cooperatives in Eastern Visayas agreed to conduct a competitive selection process for their base load power supply for 2019 to 2038 to secure the supply of electricity and achieve a uniform generation price for consumers in the region.

Saño, the general manager of Leyte Electric Cooperative (LEYECO) I, said they conducted the bid in June this year to find the generation company who could supply them the least-cost supply of power through joint power supply planning for a span of 20 years.

Saño said the prevailing generation price averages at P5.05 per kwh with a base load demand of 72 megawatts for this year in Eastern Visayas. 

He said that by 2019 onwards, they expect the aggregated base load demand among 11 electric cooperatives to increase up to 150 megawatts for the region.

The aggregation of electric cooperatives is in line with Republic Act 9136 or the EPIRA Law which provides that such joint actions shall result in improved efficiencies, reliability of service, reduction of costs and compliance to the performance standards. 

Saño said that around 600,000 households served by the 11 electric cooperatives shall benefit from the anticipated reduction of generation price.

He said that the generation charge comprises 60 to 70 percent of the total cost of the electric bill.

Wali Del Mundo, transaction adviser and professor of the University of the Philippines — Diliman, said the electric cooperatives received an unsolicited proposal from GN Power to supply their aggregated 150 MW uncontracted demand from 2019 to 2038 at a headline price of P3.33 per kwh. 

During yesterday’s bidding process, the San Miguel Corporation Global Power Holdings Corp. challenged the original bidder at P3.27 headline price. 

However, Del Mundo said GN Power won the bidding process since it offers almost the same headline price but without the risks of power plant outages.

Further, Del Mundo said that if the base load demand will increase within the contracted years, it has been agreed that the winning generation company shall not change 50 percent of the headline price.

“May mga components nag-i-increase ang presyo sa future due to inflation so what may seem cheaper now, it won’t be the same in the future. In the end mas mura pa rin ang GN Power,” he said. 

Del Mundo said the signing of contract will hopefully happen this December. The winning generation company shall build a new plant in the region before 2018 to supply the aggregated base load demand.

Del Mundo said starting January 2019, the generation component will reduce from 25 to 30 percent in the electricity bills of the consumers in the region. 

He added that the electric consumers shall benefit from a 15 to 18-percent overall decrease in the final bill including other components. 

Del Mundo said the UP Diliman – National Engineering Center initiated a competency program for electric cooperatives to play their roles under the EPIRA Law which includes the signing of long-term contracts with generation companies for power supply but with a lesser price.

“Ang analysis ng UP walang nangyayari sa EPIRA Law na ang objective ay bababa ang presyo ng kuryente, magiging maayos ang industry, magkakakaroon ng security of power. Pero parang hindi eh, nagkakaroon ng crisis, tumataas ang presyo ng kuryente,” he said.

The same has been implemented in the entire Mindanao Region at P4.09 headline price per kwh in 2013, in Region 3 at P3.70 headline price per kwh in 2014, and in Region 1 and Cordillera Administrative Region at P3.33 headline price per kwh in 2015. 

Saño hopes that the headline generation price of P3.33 shall set as a national benchmark among other generation companies and electric cooperatives in the country. 

He said that generation rates should be reduced especially now that the operational costs among generation companies are lesser with the modern production of electricity and bigger power plants. 

Del Mundo said he is already negotiating with CELCO and electric cooperatives in Negros Oriental for the same process. —/NSA (FREEMAN)