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LKI Press Statement 2021-025
LABAN KONSYUMER CALLS ECs TO ENTER INTO CSP CONTRACTS FROM
GENCOS AMIDST SURGE IN SPOT MARKET PRICES
Consumer advocacy group Laban Konsyumer Inc. (LKI) and its President Atty. Vic Dimagiba said “the impact of WESM prices greatly affected the electric cooperatives that buy more from spot market. Because of the high WESM rates, many electric cooperatives are vulnerable and exposed to experience a spike in power costs because they source so much power from the spot market. This burden heavily consumers during this prolonged pandemic. But there are solutions to assure least costs to the consumers “ .
Dimagiba further explained using recent examples, saying “Here is for Batelec II, the largest EC in the Philippines… They implemented an increase of P1.87/kWh. Here is Penelco, the EC for the province of Bataan… They implemented an increase of P1.54/kWh. In PELCO II Pampanga, the rate hike was P 2.50 pkwh. What’s surprising is the extent of the WESM exposure of all these Electric Cooperatives. For PENELCO, it was 30.78%. For PELCO II it was 40 %. And for Batalec II, it was 41%. These are June 25, 2021 increases. The Meralco power rate hike of Wesm spot market of Php 2. 2815 was the major reason for the utility’s recently announced P0.24/kwh increase for July .
Dimagiba said the energy regulators should quickly supervise the supply imbalance or distortions of electric cooperatives buying more from the spot market when there are other alternative to source power at the least cost for the benefit of the consumers . Considering the examples of ECs in Bataan, Batangas, and Pampanga that bought more than 30% of their power from the WESM , this meant that uncontracted capacities are available . ECs should conduct tender offer and invite Gencos to enter into power supply agreements via the Competitive Selection Process.The energy regulators should ensure that there will be no failed biddings considering that Gencos are benefitting from the tight supply situation.
Dimagiba also reiterated it’s earlier call for the Anti Red Tape Authority to proceed with it’s own probe , especially if there are power supply contracts of ECs pending approvals in DOE and ERC and whose pendency led the ECs to buy more from the spot market.
Dimagiba said that ensuring that ECs consumers pay the least cost mean that the energy regulators should be able to see the potential WESM exposure of ECs. The latter submit an annual power supply procurement plan to the DOE that contains the demand forecast, details of existing PSAs, those pending approvals in ERC and plans for Competitive Selection Process of PSAs. Furthermore, the ECs submit monthly reports to ERC on actual energy sources.
Dimagiba lamented that ongoing investigation on power supply by Congress had skirted the more grassroots burden of consumers of ECs who will bear paying more for their power supply.