Iloilo City power rates expected to fall on supplier competition

Business World Online
Posted on August 11, 2015 12:09:00 AM
By Louine Hope Conserva, Correspondent

ILOILO CITY -- Consumers here will be experiencing a continued drop in electricity rates over the next three years as distributor Panay Electric Co., Inc. (PECO) fields competitive offers from multiple power generating companies.

“From last year we can see that there is a drastic drop in our rates... I cannot give the exact figure as to how much (further it) will be reduced (next year), because that depends on our future power contracts,” said Mikel C. Afzelius, PECO corporate communications officer on the sidelines of an energy forum here last week.

PECO’s average rate has gone down to P10.7174 per kilowatt-hour (/kWh) this year from P11.2776/kWh in 2014.

PECO, partly owned by the Lopez Group’s First Philippine Holdings, Corp., currently sources most of its supply from Global Business Power Corp. (GBPC), one of the largest independent power producers in the Visayas with a total installed capacity of 627 megawatts (MW).

“GBPC is offering their new plant and so is the Palm Concepcion Power Corp. (PCPC). (The) Aboitiz (Group) also gave us an offer. We are studying all of these,” Mr. Afzelius said.

GBPC, 22% owned by Meralco PowerGen Corp. (MGen), is building a new 150-MW coal-fired power plant on Panay island.

On the other hand, PCPC -- a joint venture between Palm Thermal Consolidated Holdings Corp., a subsidiary of listed firm A. Brown Company, Inc., and Jin Navitas Resource, Inc. -- is expected to start operating its 135-MW coal plant by June 2016.

Aboitiz Power Corp., meanwhile, has a stake in Cebu Energy Development Corp., which supplies power to the Cebu-Negros-Panay grid, and has recently announced plans to set up solar power projects with a combined capacity of 100 MW, including on Negros island.

Mr. Afzelius added that other factors contributing to the decrease in electricity rates are lower fuel prices as well as the company’s non-dependence on power subsidies as compared to electric cooperatives that serve other parts of the Western Visayas Region.

“Cooperatives and some utilities are used to getting subsidized power from the National Power Corp. PECO pays the true rate of electricity and does not rely on subsidies,” he explained.

Meanwhile, PECO is also planning to tap clean energy with the installation of embedded solar sources by next year and purchasing 4 MW directly from independent solar producers.

The company is currently in talks with several suppliers for a 6- and 5-MW facilities.

MGen’s parent company is Manila Electric Co., whose controlling stakeholder, Beacon Electric Asset Holdings, Inc., is partly owned by Philippine Long Distance Telephone Co. (PLDT). Hastings Holdings, Inc., a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc., maintains a stake in BusinessWorld through the Philippine Star Group, which it controls. source