MORE Power expects slight rate hike amid energy crisis

MORE Power expects electricity rates in Iloilo City to increase by 20 to 40 centavos per kilowatt-hour in the April billing cycle as the Middle East crisis and summer demand continue to put pressure on the country’s power supply.

Niel Parcon, Vice President for Corporate Energy Sourcing and Regulatory Affairs of MORE Power, said the projected increase is a forecast and may still change depending on market conditions.

“It may happen, it may not happen. Most probably there will be a slight increase. Up to what extent, we can’t tell yet, but the indication is it won’t be sharp because of the modified administered price issued by the ERC,” Parcon said in an episode of MORE Power’s program More Power at Your Service.

Parcon explained that 60 percent of a consumer’s electricity bill comes from generation cost — the price of power purchased from generators and distributed to consumers.

He said the generation cost is composed of an energy mix that includes coal, natural gas, hydropower, geothermal, solar, and diesel-fired plants, with diesel being the most expensive source.

President Ferdinand Marcos Jr. declared a state of national energy emergency and instructed the Department of Energy and the Energy Regulatory Commission to implement measures ensuring grid reliability and optimizing the use of resources to prevent a sharp rise in electricity prices.

In response, the ERC issued Resolution No. 10 mandating a modified administered price for the Wholesale Electricity Spot Market, which controls pricing by prioritizing cheaper energy sources such as renewables and coal before resorting to costlier diesel-fired plants.

Parcon said the modified administered price ensures that diesel-fired plants, which typically run for only two to three hours daily during nighttime when solar power is unavailable, are compensated for their actual costs without allowing generators to exploit the situation.

He noted that one liter of diesel produces about four kilowatt-hours, placing the fuel cost alone at around PHP 40 per kilowatt-hour — significantly higher than MORE Power’s average generation charge of around PHP 5.50 per kilowatt-hour.

“The purpose of the modified administered price is number one, grid security; number two, reliability; and number three, to make sure that the prices in the electricity market will still be reasonable despite the ongoing crisis in the Middle East,” Parcon said.

As a distribution utility, MORE Power said it has reduced its dependence on the WESM and has strategically managed its bilateral contracts, which are approximately 75 percent coal and 25 to 30 percent geothermal.

Parcon said MORE Power monitors market prices around the clock, every five minutes, to ensure consumers get the lowest possible rates.

“Our experience and our track record show that for so long, we have been one of the cheapest, if not the cheapest, in the whole of Visayas area, and it’s evidence of what we are doing here for the benefit of our consumers,” he said.

Parcon appealed to consumers to help manage demand by conserving electricity, particularly during the summer season when cooling appliances drive consumption higher.

He advised households to unplug appliances when not in use, as standby mode still consumes power, and to set air conditioning thermostats to 23 to 25 degrees Celsius to reduce compressor usage.

“While we are doing our best to help you mitigate the impact of the Middle East crisis by doing everything to lower your electricity bill, help us also by reducing your consumption. By doing so, we won’t have to use diesel-fired plants, which are the most expensive in the market,” Parcon said.