DoE says Philippine electricity rates highest in Southeast Asia in June

By Sheldeen Joy Talavera, Reporter

THE PHILIPPINES recorded the highest electricity rate among its Southeast Asian peers in June, as the country relied on more expensive power plants to offset supply gaps caused by plant shutdowns in the Visayas, according to the Department of Energy (DoE).

Energy Undersecretary Rowena Cristina L. Guevara said the Philippines had an average electricity rate of P12.43 per kilowatt-hour (kWh) last month, surpassing Singapore by less than a centavo.

“In ASEAN (Association of Southeast Asian Nations), we had the highest (electricity rate). We are higher than Singapore for June,” Ms. Guevara said at a briefing on Monday.

She attributed the country’s high electricity rate to insufficient power supply, particularly in the Visayas which has been placed under a series of yellow alerts due to forced outages of several power plants.

“The Visayas grid is frequently placed under yellow alert, which is driving up electricity prices,” Ms. Guevara said.

A yellow alert is declared when the power buffer is not enough to meet the transmission grid’s contingency requirement.

“Demand is also high during the summer months,” the Energy official said. “Because of this, we need to operate more expensive power plants. Instead of risking blackouts, we opt to run costlier plants.”

Among power providers in on-grid areas, Southern Leyte Electric Cooperative, Inc. had the highest residential electricity rate in June at P16.57 per kWh amid a steep increase in generation charges, according to DoE data.

Northern Samar Electric Cooperative, Inc. followed with P15.72 per kWh, Kalinga-Apayao Electric Cooperative, Inc. with P14.53 per kWh, Manila Electric Co. with P14.48 per kWh, and Leyte IV Electric Cooperative, Inc. with P14.46 per kWh.

In off-grid areas, which are heavily dependent on oil-based generating facilities, Busuanga Island Electric Cooperative had the most expensive power rate at P24.92 per kWh.

Ms. Guevara said the DoE is coordinating with the Energy Regulatory Commission to ensure that distribution utilities and electric cooperatives are charging the right prices to consumers.

The DoE official said electricity rates may increase if fuel costs continue to rise. She encouraged distribution utilities to use cheaper fuel sources first to avoid running more expensive power plants.

Energy Secretary Sharon S. Garin also urged power consumers to adopt energy conservation measures to ease the demand on the grid.

“It’s a reminder to all of us that we can also control the price of electricity depending on our consumption. If we consume less, the electric co-ops will not be forced to use the more expensive (fuel),” she said.

Gerry C. Arances, convener of consumer group Power for People Coalition, said the Philippines’ power rates reflect its high dependence on imported fossil fuels.

“The fact that the price of electricity in our country surpassed wealthier neighbors like Singapore illustrate just how heavy a burden power bills are for the ordinary Filipino consumer,” Mr. Arances told BusinessWorld. “This is in the context of rising inflation and costs of living amid the ongoing war.”

Mr. Arances said that lowering power rates requires ending the country’s dependence on coal and gas to generate power, and utilizing more renewable energy.

“Turning to expensive electricity in the spot market whenever coal plants fail is a non-solution — especially when renewable energy alternatives, particularly distributed renewables and solar power, have long been available in the Philippines,” he said.

Meanwhile, industrial stakeholders have called for collaboration among government agencies, the power sector and other stakeholders to strengthen power availability and reliability in the Visayas.

According to the Semiconductor and Electronics Industries in the Philippines Foundation, Inc. (SEIPI), forced outages continue to affect operations of businesses as these disrupt production schedules, increase operating costs, and reduce manufacturing efficiency.

“Energy security is a shared responsibility,” SEIPI President Dan Lachica said. “Through continued cooperation between government, the power sector, and industry, we can strengthen power reliability, support manufacturing operations, and reinforce the Philippines’ position as a competitive destination for semiconductor and electronics investments.”