WHY MORE IS CHEAPER: Distributor brings rates down through negotiations, better facilities

By Francis Allan L. Angelo

Many consumers in Iloilo province are wondering why power rates of MORE Power, a private firm that distributes electricity in Iloilo City, are cheaper compared to electric cooperatives that are considered public entities.

Based on Daily Guardian’s research on the latest electricity rates of distribution utilities (DU) and electric cooperatives (ECs) in Western Visayas, MORE Power managed to keep its rate below the P10/kilowatt-hour (kWh) while the rest ranged from P11 to 12/kWh.

In a business and investment forum at the Iloilo State University of Fisheries Science and Technology in Barotac Nuevo, Iloilo on Friday, Atty. Allana Mae Babayen-on, Assistant Vice President and Legal Officer of MORE Power, gave insights on how they managed to keep rates low.

Babayen-on said “persistent” negotiations with suppliers could benefit consumers.

Power prices are volatile because of sudden movements in oil process and peso-dollar rates and even power blackouts can force DUs and ECs to buy more expensive “emergency power.” A similar scenario happened to cooperatives when Panay was plunged into darkness in January and March 2024 due to supply and transmission woes.

Most ECs have contracts with suppliers that offer cheaper rates, but that is negated when their suppliers go offline and they are forced to buy somewhere at higher rates.

But Babayen-on, who is a member of their firm’s bids and awards committee, said MORE Power negotiated with their suppliers that they will shoulder the extra cost of electricity if they are unable to supply power to Iloilo City.

“That is part of our competitive selection process (CSP) when contracting electricity from power generators. This means that if they are unable to supply and they will bring in electricity from other areas with higher rates, the rate for MORE Power will remain to avoid burdening the consumers. That’s hard negotiation and non-negotiable on our part,” she added.

Babayen-on said MORE Power also closely watches the Wholesale Electricity Spot Market (WESM) for cheaper power, especially during lunchtime when Iloilo City’s demand radically peaks.

“We have a team that monitors the WESM for cheaper rates, especially during peak periods sa city. By doing so, we are able to save some centavos for the consumers, which means a lot for them,” she added.

Investments in facilities such as insulated power lines, better poles, and newer substations can also bring down rates as these can lessen systems loss or power lost to technical reasons and even pilferage.

Under the energy regulatory ambit of the Philippines, part of systems loss is passed on to consumers and ends up in their monthly bills.

“If we cannot control the price of power from our suppliers, we can do something in areas where we have control like reduction of systems loss. By controlling the areas where we can do something, we are able to bring down the price of electricity.”

Meanwhile, MORE Power revealed that the company is awaiting the Energy Regulatory Commission’s (ERC) Certificate of Public Convenience and Necessity (CPCN) to officially commence operations in the expanded areas in Iloilo province.

Babayen-on said a 10-year plan has been made to prepare for the distribution utilities’ expansion.

“We have already made a 10-year plan wherein we have laid out our next steps once we secure our Certificate of Public Convenience and Necessity (CPCN) to expand our services to the 2nd District and the 4th District of Iloilo,” she said.

Pending the issuance of CPCN, the installation of posts and primary lines in Pavia is ongoing, according to Babayen-on.

“We’ve already done preparatory works; kung maglabay ka sa Pavia, may makita na kamo dira nga mga poste kay nagapreparar na kami. When the day comes, we can immediately provide the service sa mga gusto nga magkuha sang serbisyo ni MORE Power,” she added.

Republic Act No. 11918 expanded MORE Power’s franchise area into the towns of the second and fourth districts of Iloilo.

The expansion will encompass the city of Passi and 15 municipalities in Iloilo province – Pavia, Santa Barbara, Alimodian, Leon, San Miguel, New Lucena, Zarraga, Leganes, Dumangas, Barotac Nuevo, Dingle, Dueñas, Banate, Anilao, and San Enrique.