CEBU, Philippines - The Visayan Electric Company announced that there will be an increase in the generation charge at an average of about 85 centavos this month.
A steep increase in the Wholesale Electricity Spot Market prices on May and adjustments in the National Power Corporation process caused the increase in the generation charge of VECO in the month of June.
The average WESM purchase price went up from an average of P4.8450 per kilowatt-hour in April to P9.9578 per kWh for the May supply period.
According to Ricardo Lacson, VECO vice president for customer services, the high demand for power and low availability of coal-fired and hydroelectric power plants in Luzon, which is interconnected to the Visayas power grid, are the major contributors to the WESM price increase.
He added that the demand for power among VECO’s customers reached a high of 405 megawatts in May compared to only 349 MW in April.
“We just like to clarify that the rate impact came from generation. And it’s not VECO who is increasing, as matter of fact, there are no revenues going to VECO. It’s the generation companies who were increasing,” he said.
WESM is a venue where electricity produced by power generating companies is traded just like any other commodity. Prices are usually driven by the law of supply and demand. All power distribution companies are required to source at least 10 percent of their needs from WESM.
Aside from the increase in the cost of power from the WESM, VECO will also start implementing the NPC-Power Sector Assets and Liabilities Management Corporation (PSALM) generation adjustment recently approved by the Energy Regulatory Commission.
The approved increase in the Visayas is 60.60 centavos per kWh. To VECO customers, the increase will be less than the ERC approved amount because VECO sources only about 30 percent of its power supply from NPC-PSALM.
Its effect to VECO’s generation rates for the June billing month is 33.69 centavos, of which, 14.07 centavos is for NPC-PSALM’s April 2012 billing and 19.62 centavos for the May 2012 billing.
ERC was not able to release its decision in time for NPC-PSALM to include it into its billing to VECO for April. In effect, VECO was also not able to include the adjustment in its generation charge for the May billing.
VECO said the amount collected by generation companies is the same amount VECO will collect from its customers. This cost will also vary every month based on several external factors such as fuel prices, the foreign exchange rate and supply-demand situation.
Lacson said they expect the demand will go down next month due to the change of weather condition.
“We expect that the demand would go down because it’s already cold season and the power plants were repaired already and there’s no scheduled repair for these plants,” he said.(FREEMAN)