ILOILO CITY—Ilonggos reeling from high costs of electricity will have a respite as a result of a 35-centavo per kilowatt hour reduction in rates.
Randy Pastolero, vice president for operations of Panay Electric Company (Peco), the city’s lone power distributor, said the reduction in rates was made possible by lower generation charges and taxes in June.
He said generation charges and taxes dropped because Panay Energy Development Corp. (PEDC), which operates a 164-megawatt coal plant here, had increased its share in Panay’s electricity consumption. PEDC sells power at lower costs than owners of diesel plants in the city.
Peco services at least 53,000 households, commercial establishments and offices in this city.
The PEDC coal-fired power plant was contracted to supply 65 MW to Peco while the diesel plant of Panay Power Corp. was contracted to supply another 15 MW.
The combined generation charge for coal and diesel power dropped from P8.30 per kWh in March to P7.95 per kWh in June, Pastolero said.
He said the more power is consumed, the lower the generation charge is.
“The significant increase in power consumption during the summer months boosted our base load demand which is supplied by the coal plant. This is why the cost is lower,” Pastolero told the Inquirer.
Base load demand refers to the minimum amount of power that a supplier is required to make available.
In June, power consumption of Peco consumers reached 41 million kWh up from 39 million kWh in previous months.
The reduction in power charge was also due to a drop in rates being charged for systems loss from 86.77 centavos to 86.73 centavos per kWh, Pastolero said. He said taxes also went down by P3.85 centavos per kWh.
Pastolero said reducing generation charges by increasing the amount of coal-fueled electricity was part of efforts to soften the impact of a 32-centavo per kWh increase in rates to be collected soon by PEDC.
PEDC and Peco have come under fire from various sectors, including business groups, after the Energy Regulatory Commission granted a PEDC petition to recover P692.3 million in expenses.
Joe Marie Agriam, head of the Iloilo chapter of the Philippine Chamber of Commerce and Industry (PCCI), said the lowering of electricity rates was welcome but should not be temporary.
“How long will we enjoy this lower rate? This should be long-term; otherwise, this will just be an effort to placate consumers who are angry at the imposition of new charges,” Agriam said.