Coal prices and government subsidy adjustments lead to higher electricity tariffs from September to October

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(Screenshot from Visayan Electric’s Facebook)

Residential customers of Visayan Electric will experience an additional 13 cents increase for the September to October billing month.

The average tariff for residential customers is now P15.37/kWh from an average tariff of P15.24/kWh for the August-September billing period. The new tariff resulted in an increase of 26 PZ for customers with an average monthly electricity consumption of 200 kWh.

High coal prices on the world market continue to be the main cause of high electricity prices. This situation is aggravated by an adjustment of the government subsidy for missionary electrification and taxes for power purchases after the expiration of the contract with the Power Sector Assets and Liabilities Management Corporation (PSALM).

The Energy Regulatory Commission, in a resolution approved on August 4, 2022, approved the National Power Corporation’s application to recover the Universal Charge – Missionary Electrification (UC-ME) grant shortfall for 2012 from an amount of P2,606,208,364.83), with an equivalent rate of P0.0239/kWh.

The ERC resolution ordered all distribution utilities and the National Grid Corporation of the Philippines (NGCP) to collect from consumers the UC-ME compensation rate of P0.0239/kWh, in addition to the existing UC-ME base from P0. .1561/kWh, for a period of 12 months from September 2022.

In addition to the UC-ME surcharge, the increase in electricity rates is also due to taxes incurred for the purchase of electricity from the Electricity Wholesale Spot Market (WESM) and other contracted suppliers. after the end of Visayan Electric’s contract with PSALM last July.

PSALM, a state-owned and controlled corporation established under the Electric Power Industry Reform Act (EPIRA), has a primary mandate to manage the orderly sale, disposal and privatization of generation assets, real estate and other available assets of the NPC, and Independent Power Producer Contracts (IPP) to optimally liquidate all financial obligations of the NPC.

Last July, PSALM terminated power contracts with distribution utilities, including Visayan Electric, due to ongoing privatization. This led the electricity distribution company to purchase additional electricity from WESM and other contracted suppliers to augment the electricity requirements previously supplied by PSALM.

Purchases of electricity from WESM from non-renewable sources are subject to value added tax, compared to electricity purchased from PSALM which is tax exempt since its energy assets are renewable sources.

To help its customers cope with the high prices, Visayan Electric is offering payment terms to customers in good standing who cannot pay their bills in full. Customers wishing to request payment arrangements may do so at any of Visayan Electric’s service centers. (PR)

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