NORECO 2 bucks proposed power rate hike by KEPCO

DUMAGUETE CITY, Philippines – The Negros Oriental Electric Cooperative 2 (NORECO 2) has assured the public that along with other power distributors in Negros island, it is finding ways to reject the proposal of the Korean Electric Power Corporation (KEPCO) to increase electricity rates.

NORECO 2 acting general manager Dionefred Macahig disclosed that the coal-fired KEPCO in Naga City, Cebu has a pending request with the Energy Regulatory Commission (ERC) for a P0.45-per-kilowatt-hour increase.

KEPCO was claiming the proposed hike in power rates was due to a change of supplier of coal after a contractor in Indonesia no longer renewed its contract, said Macahig.

The five electric cooperatives in Negros Island that are clients of KEPCO have shared the same position of NORECO 2 in opposing the planned increase, which Macahig said would be passed on to electric consumers if ERC will approve KEPCO’s proposal.

NORECO 2 however has been eyeing a possible fallback scenario to deflect another round of power rate increase if this will happen, said Macahig.

He disclosed that if ERC approves KEPCO’s request for a higher selling price, NORECO 2 will reduce its contract with KEPCO by at least 50 percent through an amended contract and source power from Wholesale Electricity Spot Market (WESM) instead.

NORECO 2 is currently committed to KEPCO for a 16-mW contract and with Green Core Geothermal, Inc. for a 25-mW power supply agreement, said Macahig.

The shortfall of 8 mW, if KEPCO would increase its power rates and NORECO 2 would cut back on its contract with the former, will be supplied by WESM and only during zero-peak load to avoid an increase in electric rates for NORECO 2 consumers, he said.

Of the three power utilities supplying electricity to NORECO 2, KEPCO charges P5.62 per kilowatt hour, followed by GCGI at P5.11 per kwh and with WESM having a varying rate between P4 to P8 per kwh depending on peak or off-peak schedules.

The five electric cooperatives in Negros island that are opposing KEPCO’s proposed rate increase are NORECO I and NORECO II, Negros Occidental Electric Cooperative (NOCECO), Central Negros Electric Cooperative, Inc. (CENECO) and VMC Rural Electric Service Cooperative, Inc. (VRESCO), Macahig added. (FREEMAN)