Cushioning the electric shock

By Herbert Vego

“GRIN and bear it,” you must have heard, is advice asking  a friend to accept something that he dislikes because there is no choice. This is the situation that confronts us electricity consumers.

Yesterday’s news report was correct. The next time Mr. Bill knocks on the door, he would no longer be “as good as usual”.

Sad to say, the distribution utilities – such as MORE Power in Iloilo City and Iloilo Electric Cooperative (ILECO) in the province – bear the brunt of customers’ complaints.

Here’s what a certain Al posted on Facebook: “I wonder why the people of Iloilo still tolerate this energy supplier.”

Obviously, he does not understand that distribution utilities do not get the lion’s share of the collectible amount. Each bill is made up of six major components, namely the generation charge, the distribution charge, the transmission charge, value-added tax, system’s loss and universal charges.

Thus, the distribution utility doubles as a collecting agent for other partakers of the amount due.

Until recently, MORE had been charging the lowest distribution cost in the entire country because it had inked a one-year contract for cheaper geothermal power with the government-owned Power Sector Assets and Liabilities Management (PSALM) Corporation.

That contract expired on October 25 this year, however.  And there is no longer sufficient geothermal power from different sources to fill the growing demand.

Diesel costs higher. Solar is still impractical for mass coverage.

The price of coal, though more accessible than geothermal energy, has surged in the world market from an average US $60 per metric ton in the last quarter of 2021 to today’s $405/MT. That constitutes the reason why the generation cost has also catapulted by leaps and bounds.

The Russia-Ukraine war is often cited as the main reason for the 575% increase.

Another is the devaluation of the peso, now pegged at P58 against one US dollar.

Semirara Coal Corporation, which mines coal in Caluya, Antique, appears to have made no exception.

The generation charge passed on by a generating unit – the coal-fired Palm Concepcion Power Plant in Concepcion, Iloilo, just for example – constitutes the bulk or 51% of the amount that the distribution utility bills its customers.

Distribution utilities (DUs) – again citing MORE Power and ILECO for clarity — get only 26% of the pie for conveying power from the transmission grid to the end users. The component also includes installation of meters, poles and line maintenance.

The transmission charge imposed by the National Grid Corporation of the Philippines (NGCP) makes up nine percent of the bill. The NGCP is in charge of operating, maintaining, and developing the country’s state-owned power grid that delivers gigawatts of power at thousands of volts from generators to DUs.

The value-added tax (VAT) and other taxes, system’s loss and universal charges constitute the remaining 8%, 4% and 2%, respectively, of the total bill.

The new rates per kilowatt-hour vary.  As published in this paper yesterday, the following DUs  in Western Visayas are imposing new rates per kilowatt-hour: NORECO 1 in Negros Oriental, P18.11; NORECO 2 in Negros Oriental, P17.84; BOHECO in Bohol, P17.2086; LEYECO V in Ormoc City, P17.03; ANTECO in Antique, P16.19; CENECO in Bacolod City, P15.39; VECO in Cebu City, P15.37; AKELCO in Aklan, P15.11; NOCECO in Negros Occidental, P14.97; ILECO 2 in Iloilo, P14.90; ILECO 3 in Iloilo, P14.61; CAPELCO in Capiz, P14.60; ILECO 1 in Iloilo, P13.46; MORE Power in Iloilo City, P12.48; and GUIMELCO in Guimaras, P12.17.

MORE and Guimelco, based on rates cited, are not far apart. If I guess right, the existence of a 54-megawatt wind farm that generates over 120 gigawatt-hours of windmill electricity in Guimaras has immensely contributed to Guimelco’s winning the “crown” that used to be MORE Power’s. Until the price adjustments in August this year, Guimelco was charging P9.96/kWh while MORE Power, lower at P9.14.

But there is still a way for the poor to enjoy minimal power at subsidized rates by operation of the Lifeline Electricity Program, which is embedded in the Electric Power Industry Reform Act (EPIRA) or RA 9136. The program grants customers consuming 95/KWh or less per month special rates. Those who consume 85-95/KWh get a 10% discount; 71-80/KWh, 25%; 61-70/KWh, 35%; 51-60/KWh, 45%; 21-50/KWh, 50%; and 0-20/KWh, believe it or not, 100%!

Ask the Aetas at Barangay Lanit (Jaro district). They raised money jointly for bill deposits to MORE. Some of their families still consume only 20 kilowatt-hours or less per month.

Grin and enjoy it, black buddies.


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