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Consumers may have to pay more for electricity due to power outages

By: - Reporter / @MAgerINQ
/ 05:31 PM April 25, 2019

MANILA, Philippines — Consumers already hit by power outages may also have to pay higher electricity rates.

This was revealed on Thursday during the hearing of the Senate committee on energy looking into power interruptions in some parts of the country.

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During the hearing, Senator Sherwin Gatchalian, chair of the committee, asked officials of the Department of Energy (DOE) where the power distribution utilities (DUs) buy electricity when there are unplanned and forced outages.

DOE Assistant Secretary Redentor Delola explained that some DUs have replacement power provisions in their contracts.

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“Pag wala sa contract yung replacement power (If there is no replacement power provision in the contract), then the utilities are forced to buy from the market,” Delola said, referring to the Wholesale Electricity Market or WESM.

“If prices in the market go up because there’s thinning of supply, the consumers are burdened with the difference,” he pointed out.

Gatchalian then asked if consumers would shoulder the high prices in the spot market, Delola answered: “Yes Mr. Chair because the generation charges are all passed on to consumers.”

At this point, the senator lamented that consumers have to pay for higher rates when they already suffered from the power outages.

“So nasira yung planta nila, pero si Juan Dela Cruz ang magbabayad ng mahal na kuryente (So if their power plant breaks down, Juan Dela Cruz will pay for higher electricity rates),” Gatchalian said.

Delola, however, pointed out that it only happens if there is no power replacement provision in the DU’s contract.

Gatchalian went on to ask if power plant producers are penalized for forced and unplanned outages.

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At this point, DOE Undersecretary Felix Fuentebella explained that even if a DU has a power replacement provision, its “exposure” to the market is still about 10 to 15 percent.

“When the DU designed the provisions of the contract, yung genco (generation company) ang nape-penalize under that power replacement provision because yung genco ang bibili sa spot market. In a way penalized sya,” Fuentebella said.

(Under the power replacement provision, the genco imposes the penalties because it will buy from the spot market. So in a way, it is penalized.)

“Pero kung di naayos ni DU yung kanyang provision for replacement power at wala, si DU ang bibili sa spot market.”

(But if the DU does not have a replacement power provision, it needs to buy from the spot market.)

But why pass the burden to consumers, Gatchalian asked again.

“My point is, because of this unplanned and forced power outages, tataas yung presyo na babayaran ng consumers pero hindi naman kasalanan nung consumers itong mga forced and unplanned (consumers will pay higher rates. but it’s not their fault that there are forced and unplanned outages),” he said.

“So bakit si consumers ang mape-penalized kung mayroong unplanned at enforced outages (So why penalize the consumers when there are unplanned and enforced outages)?” the senator reiterated. /ee

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TAGS: consumers, Electricity rates, Philippine News, power outages
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