SPIKE IN GLOBAL OIL PRICES AFFECTS POWER RATES: But MORE Power still has lowest charges

By Francis Allan L. Angelo

Iloilo City will still enjoy lower electricity rates despite the P0.41 increase in the mid-April to mid-May 2022 billing of MORE Electric and Power Corp. (MORE Power).

In an advisory, MORE Power attributed the hike to higher charges in the Wholesale Electricity Spot Market (WESM).

“This power rate hike by WESM is attributed to the increase in the demand of electricity resulting to the dispatch of supply from high-priced generation units such as diesel-fired plants,” the advisory said.

MORE Power president and COO Roel Castro said the increase is very minimal at 41 centavos, from P6.82 per kilowatt-hour (kWh) in March 2022 to P7.23 per kWh in mid-April to mid-May 2022.

“The increase is more on the generation rates or the price of electricity we pay to our suppliers. The generation rate is purely at pass-through charge, meaning MORE Power is just collecting the rate set by the producers,” Castro said.

MORE Power also cited that the continuing increase in global coal prices also has a significant impact on power rates as majority of supply nationwide comes from coal-fired generation plants.

Castro said while Iloilo City’s main source of electricity is from the geothermal plant ran by state-run Power Sector Assets and Liabilities Management Corp. (PSALM), a portion of the supply is drawn from the WESM or open market which was affected by fuel prices, particularly coal and oil.

Castro said coal prices went up by 114 percent while oil prices increased by 61 percent due to worldwide inflation with the reopening of economies amid the pandemic and the Russia-Ukraine War.

“We cannot predict until when ang increase. It might be long drawn because of the Russia-Ukraine war. Russia supplies 8 percent of oil, over 10 percent for coal to the world market. The Electricity market is affected by movements in the world market,” Castro said.

Other reasons cited by MORE Power for the rate hike are the increase in the use of electrical appliances due to the summer heat and increase in demand of power in the city as its economy reopens.

Still, MORE Power’s rates remain the lowest in Iloilo City and province thanks to its geothermal source.

“This increase in power rates is minimal as MORE Power currently still sources most of its supply from PSALM which is a geothermal plant classified as a renewable energy resource shielding its customers from the full impact of the coal and fuel price increases.”

MORE Power’s P7.23/kWh rate for April 2022 is still lower compared to other electric cooperatives and distribution utilities:

-Iloilo Electric Cooperative (Ileco) 1 at P11.91/kWh (as of March 2022);

-Ileco II at P11.24/kWh;

-Ileco III at P12.46;

-Capiz Electric Cooperative at P12.84;

-Aklan Electric Cooperative at P12.20;

-Antique Electric Cooperative at P13.24

-Central Negros Electric Cooperative at P11.56;

-Negros Occidental Electrical Cooperative at P12.99;

-Meralco (Metro Manila and parts of Luzon) at P10.89;

-Visayas Electric Co. in Cebu at 13.61; and

-Davao Light and Power Corp. in Davao City at P10.56.

Castro said the current trends in the world market indicates future increases but MORE Power and even the Department of Energy cannot make a fair prediction of the actual numbers.

As to its distribution charges, Castro said it remains flat at P1.77 per kWh since MORE Power began operating two years ago.

“Our geothermal source helped ease the price increase but since energy prices are indexed or based on oil prices, affected ang electricity rate natin especially in the WESM. But MORE Power still has the lowest rate in the country. We advise our customers to be more conscientious in using electricity at this time,” he added.