The Energy Regulatory Commission (ERC) has kicked off its collaboration with the National Economic and Development Authority (NEDA) for the establishment of an electricity affordability index so Filipino consumers can fully track and be guided on the variation of the tariffs they have been paying for in their monthly electric bills.
According to the regulatory body, an initial working discussion on the development of an Electricity Affordability Index has already been carried out by the two agencies.
“The discussions centered on the objectives and possible elements/features of the proposed Electricity Affordability Index which is intended to give government agencies in the energy sector a clear view of the consumer’s capacity to pay their electricity bills,” the ERC emphasized,
The agency added that the index will “capture and reflect the nuances of every region in the country in terms of retail electricity prices.”
Based on the combined data gathered from electric power industry participants as well as economic indices already developed by NEDA and its attached agencies, “the Electricity Affordability Index is envisioned to support the adoption of government policies and programs that are sensitive to the geographic and economic peculiarities of electricity consumers.”
The Philippines has the second highest electricity rate in the region. Captive customers in most parts of the country, or consumers who cannot exercise yet their ‘power of choice’ in the retail electricity market suffer are the most affected. Even businesses are in fact agonizing over expensive power in the country.
Part of the campaign promise of President Ferdinand Marcos Jr. is to bring down electricity rates for consumers, but achieving that is still unclear and debatable at this point.
Under the Electricity Affordability Index jointly pushed by the ERC and NEDA, they are eyeing to flesh out data so the government as well as the general public would be able to understand why rates are not uniform across the country.
From the data gathered, the ERC can evaluate its action points how it will regulate the rates to be passed on by power utilities, including areas that private distribution utilities or electric cooperatives will need to improve on such as supply procurements that account for the generation charges (the biggest component in the rates); or even on the reinforcements of their own load networks.
Electricity tariffs depend on various diverse factors, including those on fuel for power generation; the cost of wheeling power from the generating plant to the grid; the investments funneled to infrastructure buildup as well as maintenance and upgrades done by power utilities; and the component of renewables incorporated in the energy mix.
For the Philippines, the long-term energy security being advanced by the current leadership will be leaning mainly on clean energy technologies, primarily RE with energy storage coupling, other technological innovations like hydrogen and ammonia, and eventually nuclear.
