Published
By Myrna M. Velasco
After recurrence of
rotating brownouts this month, consumers will have to suffer in their next
billing roughly P1.523 per kilowatt hour (kwh) surge in rates due to spikes in
Wholesale Electricity Spot Market (WESM) prices triggered by extremely strained
supply.
Official data from the
WESM and Philippine Electricity Market Corporation (PEMC) presented at the
Senate hearing exhibited that settlement spot prices already went up to P6.605
per kWh as of April 15 versus the March average of P5.082 per kwh.
With 15 percent of
power volume sold in the spot market within April, it has been calculated that
the cost impact on consumers’ bills in May will hover at P0.23 per kWh.
This estimated rate
hike will not just affect the consumers of Manila Electric Company (Meralco)
but will be shared by all end-users in the Luzon grid, including those served
by the electric cooperatives.
It has been qualified
though that the whole supply month of April is not fully concluded yet – with
at least two weeks still remaining to be collated, which is still
extraordinarily characterized by exceptionally tight supply conditions.
As could be culled further
from the WESM operator Independent Electricity Market Operator of the
Philippines (IEMOP), bilaterally contracted capacities are just at the level of
79 percent; while capacities being traded in the spot market are at the level
of 21 percent.
Around April 12 when
the severity of the rolling brownouts were happening, the secondary cap in the
WESM had also been hit – meaning, the prescribed cumulative price threshold of
P9.00 per kWh within the seven-day period had already been breached.
That then prompted the
WESM operator to enforce the secondary cap of P6.245 per kWh at least to
cushion the impact of consumers. As it appears though, even this will not be
able to fully shield ratepayers from power price spikes in the upcoming billing
cycle.
WESM data likewise
showed that a settlement price of P21.60 per kWh had been breached for
sustained 10 hours in at least one trading day within April – and the highest
prices being hit for the month were in the ranges of P16 to P27 per kWh.
Given the spikes in
prices resulting from the high costs traded in the spot market – especially in
the procurement of replacement power of power plants suffering from forced
outages, Senate committee on energy chairman Sherwin T. Gatchalian quizzed
relevant government agencies like the Department of Energy (DOE) and Energy
Regulatory Commission (ERC) why the consumers are being burdened with higher
rates when power plants suffer from outages due to technical glitches.
“There is no
disincentive for the power producers to avoid all of these (forced outages)
because they are not being penalized, so I want a policy that will penalize the
power producers because it’s the consumers that bear the brunt,” he pointed
out.
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