Electricity Rates to Increase by 10 Centavos/Kilowatthour in 2015 Summer

Manila (PNA) — Energy Secretary Jericho Petilla said Thursday that the electricity rates for 2015 summer time is projected to increase by ten centavos per kilowatthour.

“Market forces, prices will not vary with or without power crisis. Perhaps, a 10 centavos increase,” Petilla told reporters Thursday at the sidelines of the Department of Energy’s (DOE’s) budget hearing at the Senate in Pasay City.

The secretary also stressed that the summer rates at the Wholesale Electricity Spot Market (WESM) prices will also contribute to the added electricity charge.

“If the Power Sector Assets and Liabilities Management (PSALM) goes in and throws the demand to the WESM, it will be market prices. What are the market prices? Your guess is as good as mine,” he said.

Petilla said that the basis for the summer charge for the Interruptible Load Program (ILP), added generator sets and the WESM prices will be blended together, through averaging. He stressed that the rates will still not reach one peso due to the assistance of the government with PSALM’s intervention.

However, he said that the totaled incoming generation charge, including the WESM field factor, will not be more than a peso if there is no government assistance.

But the energy secretary pointed out that the higher generation charge will still be subsidized by the government with the use of the PSALM throwing of the shortage capacity to the WESM. The subsidy will come from the remaining earnings of the Malampaya project, which was previously stated by Petilla to be around Php130 million

Moreover, the DOE head said that the utilization of either generation sets or ILP will not create huge differences in the charges.

“The 10 centavos does not include the price of generator sets but it will be the same prices as ILP,” Petilla said.

He futher pointed out that the closure of Malampaya will trigger the increase in market prices due to the alternative type of fuel to be used, which will be liquid fuel, instead of the natural gas coming from the plant.

“But certainly, the electricity prices will increase this summer, even if there is no shortage, even if we don’t have emergency power. Malampaya is on shutdown, so we have to use liquid fuel. It will increase whether we like it or not,” he said.

Petilla estimates that the 2015 summer prices will not be far from the 2014 electricity rates.

Also, the secretary commits that there will be power in the summertime, minus the skyrocketing prices.

“The government will ensure that there is no brownout, with minimal impact to the consumers,” he said.

Meanwhile, the DOE is proposing an entire budget of Php4.463 billion. (PNA) FPV/JLD/UTB