News & Events

July 14, 2016

Average power rate drops 15% in Q1

MANILA, Philippines – Lower price of oil and coal led to cheaper electricity rates in the first quarter of the year, benefitting consumers in Metro Manila and surrounding provinces, a lawmaker said yesterday.
Liquefied Petroleum Gas Marketers’ Association party-list Rep. Arnel Ty said electricity generation, transmission and distribution charges were all down in January to March causing a 15 percent drop in the average electricity retail rate compared to the same quarter last year decline.
Citing Philippine Statistics Authority data, Ty said Filipino families spend an average of 4.5 percent of their annual earnings to pay for their electricity bills.
“Considering that we have the most expensive electricity in Asia, the drop in the average retail rate provides a welcome relief and cost-savings to consumers,” Ty said.
He said LPGMA has been pushing for greater competition in the local energy markets, and stronger consumer protection against potential pricing abuses as well as unfair trade practices.
About 49 percent of the country’s supply of electricity is still generated from power plants that use fuel oil and coal, according to the Department of Energy (DOE).
Ty said the average retail rate billed to Manila Electric Co. customers from January to March was P7.58 per kilowatt-hour (kWh), down P1.31 or 14.8 percent from P8.89 per kWh in the same period last year.
Meralco has 5.8 million residential, commercial and industrial customers in Metro Manila, Rizal, Cavite and Bulacan, and parts of Batangas, Laguna and Quezon.
Large end-users of electricity are seen to benefit from greater open access starting June.
Ty also said he remained confident the business sector would benefit from low-cost electricity in the months ahead, with the full implementation of retail competition and open access.
Under circular 2015-06-0010 issued by The Department of Energy, large consumers being served by their franchised distribution utilities (such as Meralco) are mandated to secure their respective electricity supply contracts directly from generating companies or from licensed suppliers not later than June 25, 2016.
The order covers end-users with an average demand ranging from 750 kilowatt (kW) to 999 kW.
“We expect competition among generating companies, electricity suppliers and aggregators to intensify because of greater open access. They will be scrambling to offer the cheapest electricity to large consumers, and this will help put a downward pressure on overall rates,” Ty said.
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