[Market Rider] Quick fixes to relieve hurting households from high power costs

Résumé détaillé

For starters, the government should cut red tape for residential and commercial solar installations

Average residential electricity rate nationwide reached P12.43 per kilowatt hour (kWh) in June this year following intense summertime demand, compounded by the extensive power plant outages in the Visayas at the time.

Power cost rose once more in July owing to geopolitical tensions and rising global fuel prices. Typical residential rate within this time hit P14.82 per kWh. This slightly fell to P14.74 per kWh in September. But in October, standard residential rate peaked again to P15.0615 per kWh.

These rates dwarfed the cost structures of power prices in Thailand, Vietnam, and Malaysia from double to even triple depending on their reported respective prices of P7.41, P5.17, and P3.34 per kWh.

This situation has left the common Philippine household hurting sorely with the highest power rates in Southeast Asia in the last five months.

The Philippine power sector was entirely privatized and deregulated under the Electric Power Industry Reform Act of 2001 or more commonly referred to as the EPIRA Law.

Like Singapore, the country does not artificially subsidize electricity. Instead, it passes the full economic cost of production, transmission, and delivery to consumers. In other words, Philippine consumers pay the “actual, unbundled market cost” of electricity.

In Malaysia, Indonesia, or Thailand, their governments heavily subsidize power costs. This structural policy for power in these countries enable their common households especially to enjoy lower electricity rates.

Based on the power rates implemented in the five-month period between June to October, the typical bill for a 200 kWh per month consumption would have been from P2,486.00 to P3,012.00, making the common household suffer as much as 21.15% increase in power billing.

Bundled into the common household’s electric bill are several cost items. These include the costs for generation, transmission, distribution, allocation for system loss, and charges for subsidies and taxes.

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