December 5, 2024 | 4:57pm
MANILA, Philippines — Electricity rates are set to rise in January 2025 after the Energy Regulatory Commission (ERC) approved on Thursday, December 5, the collection of P3.05 billion from households.
Consumers in Luzon and Mindanao will face an additional P0.124 per kilowatt-hour for three months, while those in the Visayas will see an increase of P0.033 per kilowatt-hour for six months.
The P3.05 billion represents the remaining 70% of the recalculated Reserve Trading Amount, which funds transactions in the Wholesale Electricity Spot Market (WESM).
Essentially, this amount is needed for power generators and suppliers to comply with market requirements and participate in the reserve trading, which helps maintain grid stability and reliability.
In a statement, the ERC explained the deferred payments stemmed from the moratorium imposed on March 26, which suspended the billing for the WESM’s co-optimized energy and reserve due to concerns with the ERC-approved Price Determination Methodology.
Initially, the National Grid Corp. of the Philippines (NGCP) calculated the amount to be collected from households at P9.1 billion. However, a recalculation by the Independent Electricity Market Operator of the Philippines (IEMOP) showed that the amount due for February and March was P8.8 billion.
On May 9, the ERC allowed energy providers to collect only 30% of the P8.8 billion during the moratorium.
The suspension was lifted on July 26, permitting reserve trading to resume in the WESM for contracted and merchant plants.
Following another recalculation of both February and March bills, the ERC also directed the IEMOP to adjust the value for the remaining 70% of the March billing month to consider non-compliance data from the NGCP.
With a deduction of P725 million as a result of the non-compliance data, or the instances when power suppliers fail to meet electricity reserve capacity requirements, the remaining balance to be collected from households was reduced to P3.05 billion.
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