Electricity consumers in the Davao Region urged three government energy agencies to stabilize electricity rates as power distribution companies warned residential consumers to brace for higher rates in the next billing.
The warning came at the heels of the appeal for relief early this month to the Davao Light and Power Co. from rising electricity costs when the latter announced it was collecting nearly P2 more this month from its previous rate of P10.35. The Davao Light said the increase was due to the increased rates imposed by the Wholesale Electrictiy Spot Market, the marketplace of all sources and types of generated energy, from coal and diesel to geothermal and hydroelectric.
The DCM previously warned that further rate increase would put Davao consumers at a disadvantage because ‘consumers can no longer be expected to shoulder repeated increases in their monthly power bills.’
The DCM called on the Energy Regulatory Commission, the Department of Energy, and the National Electrification Administration to implement both immediate and long-term measures that will help stabilize electricity prices. This includes accelerating investments in reliable power generation, reducing dependence on volatile spot market purchases, strengthening reserve capacity, and ensuring a more stable and affordable power supply for consumers.
‘We, likewise, renew our call for a comprehensive review of the structure of electricity bills, including the 12-percent value-added tax imposed on various components of consumers’ monthly electric bills,’ the group said in a statement.
Then came the new announcement that higher generation charges expected for July as WESM increased its prices anew, the DCM said.
‘Consumers in Davao Region should prepare for the possibility of higher electricity bills in July as rising prices in the WESM and elevated fuel costs are expected to drive generation charges up,’ it said.
Citing data from the Independent Electricity Market Operator of the Philippines (Iemop), it said average WESM price increased during the May 26 to June 25 billing period after several power plants experienced forced outages and derated operations, reducing available supply and tightening operating reserves. These conditions drove spot market prices higher.
‘The impact is expected to be felt in Davao Region, where power distributors source a portion of their power supply from the spot market. Based on June supply data, the Northern Davao Electric Cooperative (Nordeco) sourced around 78 percent of its electricity from WESM, the highest in the region. It was followed by Davao Light at 40 percent, Davao Oriental Electric Cooperative (Doreco) at 12.87 percent, while Davao del Sur Electric Cooperative (Dasureco) sourced only 0.53 percent.
It said distribution utilities with greater dependence on WESM purchases are generally more exposed to fluctuations in spot market prices, which are reflected in consumers’ bills through the generation charge.
‘Adding to the pressure are high fuel prices. Coal-fired power plants continue to supply a significant share of the electricity consumed in Davao Region, and most of the coal they use is imported. As fuel and transportation costs increase, generation costs likewise rise, ultimately affecting the price of electricity paid by consumers,’ the DCM said.
The government should seriously consider measures that will ease the burden on consumers, especially at a time when many Filipino families continue to grapple with rising prices of food, transportation, and other basic necessities.
‘Electricity is an essential service. Consumers deserve reliable and affordable power; and the government must act decisively to protect households from the continued impact of rising electricity costs,’ it said.