Consumers Warned About Soaring Electricity Bills During Summer Months – Manila Bulletin

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Soaring electricity bills during the summer months

By MYRNA M. VELASCO

The summer months could just get hotter as soaring electricity bills could further erode the purchasing power of Filipino consumers and reduced power supply could also push Luzon’s grid to breaking points.

With global fuel prices experiencing sustained astronomical peaks, Filipino consumers are warned early on that their electricity bills could skyrocket during the summer months – mainly in April and May, as higher coal prices and gas must already have been reflected in the billing. rounds.

Tariff increases will then only aggravate the difficulties associated with the thinning of energy reserves in the system, which could then trigger rotational blackouts or brownouts, particularly for the Luzon grid, if the Recurring illness from forced power plant outages again strains power grids.

At a press conference, Manila Electric Company (Meralco) Vice President Lawrence S. Fernandez acknowledged the astronomical rise in coal prices which had topped $440 a ton, while rising coal prices oil will also have its impact on Malampaya gas repricing by April.

“Coal is used for power generation, so if coal prices rise, the cost of generation will also rise and that will be reflected in generation costs,” the Meralco executive said.

The production load is a separate item in the electricity bills; and this represents about 55-60% of the overall costs borne by consumers in their monthly payments for electricity consumption.

Regarding the quarterly price revision of Malampaya fuel which supplies gas plants in the country, Fernandez noted that it is an oil price linked to Dubai crude, which is the benchmark for fuel prices. for Asian oil markets.

“On Meralco’s side, the biggest source of supply comes from power plants using Malampaya gas. Then the Malampaya gas price is affected by world crude oil prices, and we have seen in recent days that world oil prices have increased, which will eventually be reflected in the cost of production,” he said. -He underlines.

Fernandez explained that the gas repricing exercise will take place next month, therefore the impact of rising costs will be felt by consumers during the May billing period.

“So if there is an effect in the increase in global crude oil prices, we will feel it in Malampaya prices from the May production load,” the Meralco executive reiterated.

Apart from the synchronous surge in coal, gas and oil prices around the world, electricity tariffs in the country will also be affected by the fierce fluctuation of exchange rates (forex); as the Philippine peso had already fallen beyond P52 against the greenback.

Another factor influencing the cost of electricity monitored by Meralco is regulatory action on the supply side of power generators on the suspension of the Secondary Price Cap (SCP) in the wholesale electricity spot market ( WESM).

Fernandez pointed out that the secondary price cap of P6.245 per kilowatt-hour (kWh) serves as a cushion for sustained price increases in the spot market; but if this will be scrapped, especially in the summer months when supply is low, it is all the more so as consumers will be distressed by mega-rises in electricity rates.

“In general, the secondary price cap was intended to mitigate the impact of high and sustained WESM prices, so if there is a suspension of the secondary price cap, we could see more price spikes in the spot market” , Fernandez said.

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