Senate working on 4 bills to lower electricity rates
By Lenie Lectura – October 2, 2018
from Business Mirror
CONSUMERS are assured of P1.1741 per kilowatt-hour (kWh) of potential savings if and when four bills meant to lower electricity rates are passed into law.
During last week’s forum on “Energy Outlook: Supplying Rising Demand at Lower Cost,” Sen. Sherwin T. Gatchalian, chairman of the Senate Committee on Energy, called for the swift implementation of energy-sector reforms. He proposed several measures to achieve this.
The first measure, the Energy Virtual One Stop Shop (Evoss) Act of 2017 (Senate Bill 1439) seeks to cut pervasive red tape in the permitting process of new power-generation projects.
It proposed to implement a single electronic network-based platform where all companies can apply and submit all documents for new energy projects and receive action on these applications.
Evoss remains pending in the House of Representatives after the Senate approved it on third reading last year. The approximate potential savings is P0.35 per kWh. It mandates a specific timeline for each government agency to act on all applications, which would be deemed approved if they fail to act within mandated timeline.
Currently, the permitting process for a hydropower project would take 1,340 days.
Senate Bill 1653, or the Competitive Selection Process (CSP) Act, seeks to foster transparency and competition in power-supply contracting by requiring all generation contracts to undergo open bidding. Through this, Gatchalian said it would be possible to “discover the real cost of electricity in order to get the lowest price for the benefit of the consumers.”
The measure, which could cut down rates by P0.13 per kWh, is currently in the period of amendments.
The bill will require distribution utilities to submit a power-supply procurement plan which will be the basis for the schedule and demand procured through CSP. There will be a third-party auctioneer who will conduct the CSP.
The Murang Kuryente Act, a measure based on a bill authored by Senate President Pro Tempore Ralph G. Recto, proposes to use the P207-billion Malampaya Fund to pay the stranded contract costs and stranded debt of the National Power Corp. (NPC).
Once obligations are fully paid, the fund will be used again for exploration, development and utilization of energy resources.
If approved, savings could amount to P0.5745 per kWh.
Senate Bill 1623, meanwhile, seeks to reduce the cap on electricity-system losses charged by distribution utilities to consumers. Now on third and final reading, this measure will result in P0.1196 per kWh in savings.
Systems loss refers to the difference between the electric energy delivered to the distribution system and the energy delivered to the end-users and other entities connected to the system.
From 8.5 percent, utilities will only be allowed to pass on 5 percent of system losses. The cap for electric cooperatives will be lowered to 10 percent from 13 percent.
Gatchalian noted that electricity rates in the country are among the highest in the region mainly due to bureaucratic inefficiencies that drive away potential investors; the lack of competition and transparency in power-supply contracting; and the rising stranded contract costs and stranded debt left behind by NPC.
