Coal power deal hikes rates by P3/kWh in Iloilo City

ILOILO CITY—After a brief respite from power rate increases, residents of this city will have to pay higher for electricity derived from coal, touted by its proponents as a cheap source of power, starting next month.

The Panay Electric Company (Peco), the city’s lone power distributor, announced that electricity rates would go up by P3.20 per kilowatt hour (kWh).

The increase, which will be reflected in the October bill of consumers, will raise electricity rates in the city from P7.31 per kWh in the August billing period to P10.50 per kWh.

The new rate is slightly higher than the P10.40 per kWh rate before July when Peco reduced its power rates by P2.69 per kWh to P7.71 per kWh.

Peco, one of the oldest private electric firms in the country, is the lone electric distributor of the city’s 180 villages with at least 40,000 consumers.

Peco operations manager Randy Pastolero said on Wednesday the increase in rate was a consequence of the approval by the Energy Regulatory Commission (ERC) of the electric power purchase agreement between Peco and the Panay Energy Development Corp. (PEDC).

In its decision issued on Aug. 22, the ERC approved the agreement covering 25 years.

Under the agreement, PEDC will supply 65 MW of electricity to Peco from its 164-MW coal-fired power plant in Ingore village in La Paz District, Iloilo City.

A subsidiary of the Metrobank-owned Global Business Power Corp. (GBPC), PEDC also supplies power to other electric cooperatives on Panay Island.

Pastolero said the low rates for the past three months were “artificial” pending the approval of the Peco-PEDC power purchase agreement.

He said, however, that the new rate was still competitive or even lower than those of other electric cooperatives.

The city’s power demand is expected to increase from a daily peak of 77-82 MW this year to 97 MW in 2014.

Peco consumers have previously complained of excessive rates and poor service, including power interruptions.

But the electric distributor has denied these and has blamed a shortage in power supply for the brownouts.