DOE presents plan to soften impact of high power rates

MANILA, Philippines - The Department of Energy (DOE) has presented a five-point plan to mitigate the increasing power rates in the country.

Energy Secretary Jose Rene Almendras, who describes the soaring power rates as a complex issue, said the government has not stopped in finding ways to lower the impact of rising electricity rates on consumers.

“In determining if rates are high or low, you have to factor in a lot of things. There is the generation charge, transmission charge, and distribution charge so we have to see the issue on rates and apply a holistic approach and we need not just one but five measures to address the issue on rates,” Almendras said.

In a Senate Hearing for the approval of the DOE Budget, Almendras explained in detail the Executive Branch’s plans to ensure there is adequate power supply and measures how to mitigate the adverse impact of increasing electricity prices.

First, he emphasized the need for baseload plants in the country. This includes the need for appropriate baseload technologies and the technological know-how to apply it to the local power setup in the country.

“The current situation is, we are using non-baseload technologies for baseload demands. Right now, the baseload applicable for us is coal, and as much as I have been criticized, we really need it right now.” Secretary Almendras earlier said.

The DOE is also currently reviewing bilateral contract structures which will establish a reward system for the more efficient generators. It is envisioned that the rewards to the generators will eventually be shared and translated to savings for its customers.

Second, he said the need for the continued attention to the Wholesale Electricity Spot Market (WESM) to ensure that prices are appropriate for the situation.

“There is also a need for a reformat of the WESM. The goal is to transform it to an independent market,” he said.

Third, he reiterated that the government particularly the Department of Energy is thoroughly reviewing the applications for Universal Charge (UC) and the possible strategies to mitigate its effects.

“I think people only see the news on UC applications which is why they think that power rates have been going up. The problem is, the filings of such applications are in the law but that does not mean that we are not doing anything about it. We have been doing a lot of things to ensure that the filings will not have a big effect on consumers.”

Fourth, to provide power to far flung areas, the DOE has been reviewing and pushing for the rationalization of the Universal Charge filings for missionary electrification to ensure that the fund will be used efficiently to provide power to those who still do not have electricity. In addition, the DOE is now fast tracking the privatization of SPUG and is ensuring that the areas are utilizing the most efficient technology towards lower charges.

He also underscored the DOE’s efforts in addressing the challenge in the power distribution sector particularly, the electric cooperatives.

Currently, the DOE is pushing for the amendment of the National Electrification Administration (NEA) Charter to effect efficiency in the operations of the electric cooperatives nationwide.