Group Seeks Reduction in Power Rates
MANILA, Philippines - Electricity rates in the country should go down amid the general decline in the cost of primary energy sources like oil, Rep. Arnel Ty of party-list group Liquefied Petroleum Gas Marketers Association said yesterday.
“It is not just the cost of oil that is down, coal prices are also deflated,” he said.
“In fact, geothermal power producers are already slashing their rates so that they can compete more aggressively with coal-based suppliers of electricity,” he said.
Ty cited the case of Lopez-owned Energy Development Co. (EDC), which he said has reduced the average tariff of its Palinpinon-Tongonan geothermal plants by around 7.5 percent.
EDC has said it had to lower its prices “to extend the life of its supply contracts with most of its customers amid historic low coal prices.”
Ty said some 41.4 percent of the country’s power supply is derived from geothermal resources, 28 percent from coal, 15 percent from natural gas, 11.4 percent from hydro, 3.9 percent from diesel and fuel oil, and the rest from biomass, biodiesel, solar and wind energy.
Power rates should be going down, on account of the overall decline in energy costs. If producers are cutting their tariffs, electricity distributors should be rolling back, and not jacking up their rates,” he said.
He said even if power producers affected by the shutdown of the Malampaya natural gas plant in Palawan have to use alternative fuels, the costs of those substitutes are also down.
“Power producers and distributors should allow consumers to benefit from cheaper electricity owing to the drop in energy prices,” he stressed.
Ty projected that the costs of other energy sources would remain as long as oil prices are down.
He said oil prices would likely fall some in the wake of the nuclear deal between Iran and world powers led by the US.
The subsequent easing of sanctions could mean a flood of Iranian oil exports, he said.