By Ted Aldwin Ong
MORE Electric and Power Corporation’s (MORE Power Iloilo) full connection to the Visayas grid paved the way to tap environment-friendly power sources and resulted in lower rates.
Last week, MORE Power announced a big drop in the power rates for Iloilo City power consumers starting July 2021.
The more than 83,000 residential consumers will enjoy a P3.55/kWh drop or from P10.0149/kWh for June to P6.4562/kWh this July and in the next six months.
“The reduced rate by MORE Power is by far the lowest that a distribution utility has attained based from my experience being with the power industry in the last two decades,” said Roel Z. Castro, President and COO.
“We are hoping to sustain this development for the long term as we have assured the Ilonggo consumers that we are serious and sincere in looking for the best rates for Iloilo City,” added Castro during the virtual press conference held July 22.
This is the second round of rates reduction by MORE Power in the span of two months.
Last May, residential consumers likewise received a P0.551/kWh reduction because of its reconnection to the Visayas power grid.
MORE now draws 100 percent of its supply requirement from the Unified Leyte Geothermal Power Plants ran by the Power Sector Assets and Liabilities Management Corp (PSALM).
Since the source is renewable, consumers were spared from paying value added tax (VAT) which is levied on conventional or fossil-fuel based power producers.
The elimination of the VAT contributed to the rate slash consumers will enjoy.
RELIEF FOR CONSUMER CLASSES
The reduced rate by MORE Power will be applied across different classes of power end-users.
Apart from residential consumers, the power utility is serving six categories of end-users in the city, namely: intermediate, commercial, power, city streetlights, city offices, and other government.
These consumer categories will likewise get a P3.310 reduction on rates ranging from P9.22 to P9.49/kWh for June to P6.00/kWh this July.
The rate will have a big impact to local business, Castro stressed, as we have been eyeing how we can encourage business to come in and thrive in the city.
The rate reduction is a welcome relief for the hotel and accommodations sector who are reeling from the impacts of the pandemic.
“I have never seen a 6-digit electricity bill. At the height of the pandemic last year, our bill was 7-digit,” expressed Natalie Lim, general manager of Richmonde Hotel Iloilo.
“As a business enterprise that was badly hit by the pandemic and continues to grapple through it, the reduction is a big relief for power is one of our biggest operational cost,” Lim said.
RECONNECTION TO THE GRID PULLED DOWN RATES
Again, the single biggest factor that drastically brought down the power rates according to Castro is its move to reconnect to the Visayas power grid managed by the National Grid Corp. of the Philippines (NGCP).
The power utility constructed a 69-kilovolt transmission station in Brgy. Banuyao, La Paz to connect directly to the grid where mechanisms for a lower power rate supply are in place through the Wholesale Electricity Spot Market (WESM).
It inaugurated the transmission station in May 18, and it started to draw power in May 26.
The move immediately pulled down power rates for Iloilo City consumers which totaled to P0.405/kWh in the monthly charge last May.
In the “Daily Guardian on Air” over Aksyon Radyo-Iloilo anchored by editor-in-chief Francis Allan Angelo, Castro shared the factors that resulted to the first round of rates reduction, namely: Generation Charge, Transmission Charge, System Loss, and a decrease in lifeline and senior citizen consumers subsidies.
It reduced Generation Rate by P0.358 reduction or from P6.251 to P5.893; second, Transmission Charge went down by P0.012 or from P0.287 to P0.275 and; System Loss dropped by P0.035 or from P0.523 to P0.488.
MORE Power also reported that a fourth factor played up in the decrease of rates and that is the reduced availment of subsidies by lifeline consumers or those power end-users whose monthly electricity use are lower than 100/kWh.
SIGNIFICANT
MORE Power considered the 100 percent connection to the grid as a significant step to deliver its promise of reduced rates to Iloilo City.
Initially, MORE Power sourced 70 percent of its power supply from independent power producers like Panay Energy Development Corp. (PEDC) and Panay Power Corp (PPC) in Brgy. Ingore, La Paz.
It also sourced power from Aboitiz Power Renewables Inc. and KEPCO-SPC Power Corp. under a 1-year emergency power supply agreement as mandated by RA 11212, its franchise law.
The utility was left with only 30 percent legroom to source from the grid.
Hence, it moved to establish its transmission facility to connect to the power grid to set a favorable condition to meet its target of bringing down power rates for Iloilo City.
After connecting to the Visayas power grid, MORE Power has begun its Competitive Selection Process (CSP), a mechanism which will allow the utility to select its sources from numerous providers who can offer reliable supply at justifiable rate, and probably from clean sources of energy.
MORE Power expects that Iloilo City’s power rates will most likely regularize between P6.00 to a maximum of P7.00/kWh for a longer period considering that there are no major drivers on sight that will radically drive rates up in the coming months.
