DUMAGUETE CITY, Negros Oriental (PIA) – The Negros Oriental II Electric Cooperative (NORECO-II) clarified that the recent increase in their power rates was a result of the implementation of directives from regulatory government agencies.
In a recent Kapihan sa PIA forum, NORECO-II strategic planning and rates division manager Cyrile Dianne Therese Baliola explained that the Energy Regulatory Commission’s (ERC) decision on Case No. 2024-017 MC directed power distribution utilities, including electric cooperatives, to implement a staggered collection of the Wholesale Electricity Spot Market (WESM) component of their generation charge.
The collection of the generation charge will be done in four months, from June to September this year.
WESM is a centralized venue for electricity trade between buyers and sellers where prices of electricity are determined by the demand and availability of supply.
The price of electricity bought at WESM rose during the summer months, especially in May due to high consumer demand, which prompted the declaration of red alerts in some parts of Luzon and Visayas.
The ERC ruled that the rate of which the electricity was bought during May would be collected at 25 percent, spread out in a period of four months.
“Instead ang consumers bearing the full brunt in May, the cost was spread in four months from June to September. However, we can feel the effect in the succeeding months – July to September. The effect of that ERC decision is an increase of the rates. On top of the regular WESM bill, there’s an additional 25 percent katong mga ¼ , ¼ of the May 2024 nga bill added to that normal monthly bill nato sa WESM,” Baliola said.
(These are 1/4 of the installment of the May 2024 bill that is added to the monthly bill paid to WESM.)
The Department of Energy (DOE) also directed the National Grid Corporation of the Philippines (NGCP) to resume the commercial operation of the reserve market for ancillary services, which enabled the NGCP to implement the ancillary services reserve market billing starting August 2024.
“The total ancillary service reserve market charge ni NGCP kato sa first nilang billing was around P33.94 million exclusive of VAT. The VAT component is P3.9 million. This resulted in a 50.16 percent increase in our transmission charges,” Baliola said.
(The total ancillary service market charge of NGCP for their first billing was around P33.94 million exclusive of VAT. The VAT component is P3.9 million. This resulted in a 50.16 percent increase in our transmission charges.)
Baliola cited that the ancillary services are necessary for NGCP to ensure the reliability of the grid.
These ancillary services come in when there are faults or fluctuations in their system.
The NORECO-II official explained that the generation cost and transmission cost are factors in determining the electric bill for their member-consumer-owners (MCOs).
“Ang September nato na rate didto nagtipun-og ang tanan issuances sa atoang mga regulator including na ang last installment sa 25 percent sa May (WESM charge) and also ang pinaka-last is ang lifting of the suspension of the ancillary services,” Baliola said.
(The effect of these issuances was heavily felt in September. These include the last installment of the May WESM charge and the lifting of the suspension of ancillary services.)
NORECO-II’s published power rate for residential-type consumers for September 2024 is P14.4157.
This reflected a P1.6962 increase in the power rates from August, which is P12.7195.
Meanwhile, low voltage consumers (commercial, industrial, public buildings, irrigation, and streetlights) also experienced an increase in their power rates from P11.8689 in August to P13.5656 in September.
There was also an increase in the power rates for high voltage consumers for the same period from P10.1703 to P11.2812.
Baliola assured their MCOs that the electric cooperative has taken steps to shield the MCOs on the volatility of the prices of electricity in WESM in the future.
For now, NORECO-II participates in a competitive selection process for power suppliers to ensure fair price of electricity.
NORECO-II will also enter into an agreement with the Filinvest Development Corporation Utilities Group for the procurement of emergency power supply for 18-megawatt baseload power supply.
Aside from this, the cooperative will also embark on embedding renewable energy facilities in their system.
Baliola said they will start energizing Apo Island in Dauin town as a pilot site for its renewable energy embedding project.
Once these projects take-off, the electric cooperative can switch to these alternatives from WESM in case there will be another surge of prices in WESM. (RAL/PIA7-Negros Oriental)
