Why PH power rates among highest in Asia? - PH Trending

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Tuesday 24 February 2015

Why PH power rates among highest in Asia?

Electricity rates in the Philippines are among the highest in the region according to the National Statistical Coordination Board (NSCB).

“Data from Asean Center for Energy show that among the ten countries in Southeast Asia in 2007, the country ranks as having the third highest residential electricity tariffs, fifth highest for commercial, and fourth highest in terms of industrial electricity tariffs,” NSCB secretary-general Jose Albert said. NSCB said that a study conducted by the Perth-based consultancy firm, International Energy Consultants (IEC), placed the rates in Luzon as having the ninth highest electricity tariffs of the 44 countries surveyed.

 Indonesia, Thailand, and Malaysia, where the government subsidizes electricity costs unlike PH that's one main reason. “These subsidies eat up a large chunk of public budget. In Indonesia, for example, energy subsidies account for 24 percent of the 2013 public expenditure plan,” the NSCB paper said.

It also said that generation costs is 65 percent of what customers pay for.
“Generation is the segment of the electricity industry, which produces power from sources like coal, diesel, natural gas, hydro and geothermal. Generation makes up the biggest component of our electricity tariff. Roughly 65 percent of what customers pay for goes to this segment. This means that for every one peso you spend on your power bill, about 65 cents goes to the power generators,” Albert also said.

“The tariff which goes to distribution companies accounts for 16 percent of the total power bill. The rate of distribution varies across customer segments. It is generally progressive, which means that as you increase your power consumption, the amount you pay per kilowatt hour also increases,” Albert said.

Companies in the distribution business are the Manila Electric Co. (Meralco), the Visayas Electric Cooperative and electric cooperatives in the provinces. “This is the segment of the industry which delivers power from the producers to the households, commercial establishments, and industries,” Albert also said.

Aside from generation and distribution, electricity consumers also pay for transmission costs, which is the bridge between the power generators and the distribution utilities. “Transmission makes up 8.7 percent of the power bill,” Albert said.


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