High power rates a ‘cross to bear’ for PH consumers

By Myrna M. Velasco – April 13, 2017, 10:01 PM

from Manila Bulletin

With the stop-and-go competitive regime in the restructured power sector, expensive electric bills will continue as a “cross to bear” for majority segments of the Filipino consumers.

This is the same predicament that the Department of Energy (DOE) has been finding a solution to, but required fixes are still not easily reached.

Energy Secretary Alfonso G. Cusi albeit indicated that his department is pushing the envelope when it comes to measures and polices that could help pare electricity rates for the consumers.

That as he cited in the recent gathering of the Philippine Norway Business Council (PNBC) that the Philippines still has the highest electricity rates in the Southeast Asian region, primarily for residential and commercial end-users.

The energy chief cited average power rates for selected Southeast Asian countries in 2015, but it must be culled that market fundamentals had not really changed much since then.

Cusi primarily noted the average P8.61 per kilowatt hour (kwh) being paid for by Filipino household consumers as the most expensive rate in the ASEAN region.

That had been compared to the residential rates of Singapore at equivalent P7.60 per kwh; Thailand at P6.01 per kwh; Indonesia at P5.48 per kwh; Vietnam at P4.58 per kwh; and Malaysia at P4.02 per kwh. For commercial end-users, tariff is still most prohibitive for the Philippines at P7.19 per kwh versus Singapore’s P6.41 per kwh. The Singapore power market is a perfect comparison for the Philippines because it is also on parallel restructuring process – but the surprising twist is its ability to still have cheaper rates considering that it leans on gas for more than 95-percent of its electricity needs.

Gas, as claimed by many Philippine power industry players, is supposedly a more expensive option than coal – but that is being negated by the industry circumstances of Singapore.

For other countries in the region, their rates for the commercial segment are as follows: P5.48 per kwh for Indonesia; P4.64 per kwh for Vietnam; P4.55 per kwh for Thailand; and P4.10 per kwh for Malaysia. For industrial customers, the Philippines slipped into the second spot at P5.63 per kwh vis-à-vis Singapore’s higher rate of P6.09 per kwh.

Indonesia still came in third at P5.48 per kwh; followed by Thailand at P4.55 per kwh; then Malaysia at P3.78 per kwh; and lastly Vietnam at P3.64 per kwh.

Cusi previously proposed using the Malampaya fund as one mechanism to trim electricity rates in the country, chiefly targeted to retire the mounting debts of the Power Sector Assets and Liabilities Management Corporation (PSALM) so the universal changes on stranded liabilities could already be expunged in the electric bills.

That, however, would require legislation that may take some months or years to bring to fruition.

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