The Senate committee on energy has urged the National Electrification Administration (NEA) to take over management of the Palawan Electric Cooperative (Paleco) as consumer frustration boils over the constant occurrence of power outages in the province.
NEA records show the Paleco’s average interruption frequency index is incompatible with the reliability standard of no more than 20 such occurrences per year under regulations. Its performance is also inconsistent with the standard set by the Philippine Distribution Code.
“If the Paleco cannot fulfill its mandate of supplying sufficient and affordable electricity to Palawan, then maybe the responsibility of providing power in the province is better off in the hands of NEA,” said Sen. Sherwin Gatchalian, vice chairman of the Senate committee on energy.
In December 2018, NEA also took over management of Paleco amid frequent power outages at the time.
In a separate development, the Energy Regulatory Commission (ERC) said consumers stand to gain from lower power prices this year if the downtrend noted at the wholesale electricity spot prices persist throughout the year.
According to the ERC, the average effective spot settlement price (ESSP) had noticeably fallen in the grids, averaging P6.505 per kWh at the close of 2023 and lower by more than one peso compared to the average ESSP in 2022 of P7.885 per kWh.
ESSP is the indicative effective price paid by large consumers and distribution utilities for purchases at the Wholesale Electricity Spot Market (WESM) each month.
The ERC said new capacity in 2023 contributed to this development since 35 generation companies using renewable energy (RE) technologies were added as WESM trading participants, resulting in additional capacity of 749 megawatts (MW) as of end-December 2023.
Their entry significantly increased the average supply last year reaching 15,645 MW or 17 percent more than only 13,375 MW in 2022.
The ERC also said the completion of the Mindanao-Visayas interconnection project further contributed to the decline in the ESSP.
Nevertheless, the regulator found notable disparity between the substantial reduction in coal prices globally versus the actual decline in generation rates in the country.
The ERC said while there was convergence in the increase when coal prices were rising, there was divergence at the time when fuel prices were declining.
Separately, the Senate committee on energy where Gatchalian sits as vice chairman has urged government to fast track the hybridization of off-grid areas to help shield consumers from volatile global oil prices.
Hybridization has to do with power system capacity to generate and store energy. This duality is seen to further improve the local energy sector.
Gatchalian made the call as the National Power Corp. (NPC) proposed another round of power rate adjustments in off-grid areas as crude oil prices climb on the back of domestic and global influences.
NPC oversees 281 Small Power Utilities Group or SPUG power plants which are mostly diesel-fired generator sets in remote areas not connected to the main grid.
The senator said the petition could push the cost of electricity higher by P9.7068 per kilowatt-hour (kWh) or 17.54 percent compared to current rates.
Gatchalian said while the NPC already committed to focus on hybridization and away from new diesel generator sets, it is also important to accelerate the hybridization of off-grid areas.
NPC earlier said that hybridization is expected to result in savings ranging from P0.75 to P1 per kWh, apart from ensuring a steady supply of energy in off-grid areas.
“Hybridization would help increase the volume of renewable energy and thus help ensure energy efficiency and security which are vital in jumpstarting economic development in these areas,” Gatchalian said.
