INC.

Manila's Big Power Bill

Electricity Rate Highest In Asia-Oceania Region

By MYRNA M. VELASCO

March 28, 2012, 10:10pm

MANILA, Philippines — Metro Manila residents still pay the highest electric bills in Asia and Oceania, according to a 2011 survey by the Japan External Trade Organization (JETRO).

Metro Manilans are charged by the Manila Electric Company (Meralco) $0.23 per kilowatt hour (kWh) or an average of P8.48 per kWh, JETRO said.

The survey covered 31 major cities in the Asia-Oceania region. Aside from energy prices, it also tackled other investment-related costs such as wages, taxes, land prices and office rents, telecommunications expenses and other public utility rates.

Electricity has become a serious concern in the Philippines after rotating brownouts hit Mindanao.

But brownouts are not the only problem facing power users. The National Power Corporation (Napocor) has announced an increase in electricity rates that will be reflected in its March 26-April 25 billing cycle.

In Luzon, there will be an increase of 69 centavos per kilowatt hour as Napocor applies the deferred accounting adjustments (DAAs) on generation rate adjustment mechanism (GRAM) and incremental currency exchange rate adjustment (ICERA) charges.

Visayas consumers will see a 60 centavo/kWh increase, while Mindanao will have the smallest increase: R0.0440 per kWh.

The JETRO survey is the second conducted by an international agency where the Philippines ranks as having the most expensive electricity rates in Asia. In 2010 an Australian consulting firm found that Manila’s residential rates surpassed those of Tokyo’s.

The JETRO study found that Meralco’s power rates for businesses of $0.12 to $013 per kWh to be generally competitive with other countries, such as those in Beijing and Shanghai, China’s $0.12-$0.13 per kWh and Thailand’s $0.12 per kWh.

Ranking-wise, Meralco’s rates for business could skid to 5th or 6th place, based on the ranges presented in the survey.

Karachi, Pakistan, has the highest rate in the business category with $0.94, followed by Phnom Penh (Cambodia) with $0.19 per kWh; and Singapore with $0.18 per kWh.

The JETRO study noted the presence of peak and off-peak rates of the cities surveyed and it noted that the estimated rates still excluded basic charges.

  • Next to Manila ($0.23/kwh)and Tokyo’s high residential power rates would be Singapore at $0.20 per kWh;
  • Sydney (Australia) and Cebu (Philippines) at $0.19 per kWh;
  • Colombo (Sri Lanka) at $0.18 per kWh;
  • Mumbai (India) at $0.16 per kWh; Phnom Penh at $0.15 per kWh;
  • HongKong at $0.14 per kWh;
  • Auckland (New Zealand) and Taipei (Taiwan) at $0.12 per kWh;
  • Kuala Lumpur (Malaysia) and Karachi at $0.11 per kWh;
  • Shenzhen (China) and Chennai (India) at $0.10 per kWh;
  • and Jakarta (Indonesia); Shanghai and Guangzhou (China) and New Delhi (India) at $0.09 per kWh.

The Asian city residents paying the lowest electricity rates are those in Dhaka (Bangladesh) at $0.06 per kWh; followed by Seoul (Korea), Beijing (China), Batam (Indonesia) as well as Hanoi, Ho Chi Minh and Da Nang (Vietnam) at $0.07 per kWh. The next ones at $0.08 per kWh are Dalian, Shenyang and Qingdao (China); Bangkok (Thailand); Yangon (Myanmar); and Bangalore (India).

Energy Secretary Rene D. Almendras conceded that the country’s rates for residential consumers remained the highest in Asia, and suggested that the diversification of technology utilization in power generation can eventually bring down prices.

Almendras said the lower rates cornered by Meralco in its new bilateral supply contracts was “a good starting point” in reducing power rates for residential customers.

The same question on high electricity rates was raised at the Euromoney Investment Forum where Almendras was pressed on the policy directions that the government has been pursuing as this is seen as a “significant hindrance that must be overcome to encourage foreign direct investments to flock into the country in greater numbers.”

Beyond the components already inputted in the electricity bills, the rate components are expected to even go longer this year with the expected addition of the universal charges to be passed on by the Power Sector Assets and Liabilities Management Corporation (PSALM) as well as the feed-in-tariff (FIT) to be levied for renewable energy developments.

PSALM’s initially proposed UC pass-on rate alone will be around 39 centavos per kWh; while the FIT Allowance for RE to be supplied to distribution utilities may be around 10 centavos per kWh, based on the approved installation targets.

Source:

http://www.mb.com.ph/articles/355668/manilas-big-power-bill

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