BENECO explains scenarios for rate decrease
By LAARNI S. ILAGAN
Photo Credits: #53 PhilRECA Party-list.
There are two possible developments that could result to lower electricity rates for member consumer owners – a dive in the generation cost and the removal of the Ancillary Services Reserve Market (ASRM) component of the transmission charges.
Once these two kick in, the MCOs will enjoy a decrease in power rates, Fraiser Angayen, non-network services department manager, said.
The generation rate is collected by distribution utilities, like BENECO, from MCOs and is remitted to the DU’s power supplier. The charge is variable, meaning it can go up and go down depending on foreign exchange rate and cost of fuel particularly for power plants that rely on coal.
It is the pass through component of the bill that significantly eats up more than 50% of the monthly power bill, Angayen said.
The ASRM, meanwhile, refers to those charges bundled with the transmission charge which normally refers to the cost of transmitting power from the power generators to the DU’s distribution lines.
The ASRM covers the charges consumer pays for standby power suppliers that are tapped once the regular power generators are unable to meet the demand.
The ASRM was meant to promote stability in the grid to avoid the collapse of the system when there is lack of enough power supply for the grid.
Angayen said that the October bill of BENECO for ASRM increased to P16, 594,852.44 in October from P12,094,644.85 in September. The increase was P4,500, 207.59.
The so-called “Power Bloc” in Congress, composed of the Philippine Resilient Electric Cooperatives and Consumers Alliance (PhilRECA) Party-List and the Association of Philippine Electric Cooperatives (APEC) Partylist have called for the removal of the ASRM, saying the charge has significantly contributed to the increase in power rates.
In a joint statement, the “Power Bloc” said that since the ASRM resumed commercial operations on August 5, 2024, electricity prices have surged significantly. “This increase has sparked serious questions about the market’s structure and its impact on consumers already facing financial pressures,” the statement said.
The ancillary services charges increased nationwide. In February, 2024 or one month after the commencement of the commercial operations of the reserve market, Luzon experienced a 31.4% increase, Visayas, 64.4%, and Mindanao, 58%.
In August, 2024 when the reserve market resumed operations after its suspension, these figures worsened, with Luzon seeing a 40.7% increase, Visayas 35%, and Mindanao 78%.
The reserve market was initially established to promote a competitive price in the spot market and ensure affordable electricity rates. However, its implementation has led to higher costs for consumers, contradicting its original goals.
Rep. Sergio Dagooc of APEC Partylist, said, “our primary concern is the welfare of Filipino consumers. The significant increases in electricity rates since the implementation of the reserve market are alarming and contradict its very purpose. We cannot stand idly by while our constituents struggle with ever-increasing power bills.”
Meanwhile, Rep. Presley de Jesus of PhilRECA, added: “The current situation in the energy market is untenable. We are committed to working with our colleagues in Congress, the DOE, and the ERC to find a solution that protects consumers while maintaining the stability of our power grid.” **(LSI)
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