A contractor repairs a Veco line affected by the rotational brownouts in this 2014 photo. (CDN PHOTO/ TONEE DESPOJO)
Cebu City Councilor Nestor Archival wants to look into all applications related to power and power supply contracts in Cebu submitted to the Energy Regulatory Commission.
In a privilege speech during the council’s regular session this morning, Archival said he was concerned about the reported increase of P.20 to P.30 per kilo watt hour imposed within the Visayan Electric Co (Veco) franchise area, which was in contrast to Manila Electrical Co. ‘s (Meralco) reduced power rate of P.90 to P1 per kilo watt hour.
Both adjustments were affected by the power cost at the wholesale electricity spot market (WESM).
Archival, chairman of the committee on energy transportation, communication and other utilities, said he did a “technical analyses” on the contrasting adjustment of Veco and Meralco after his office was “bombarded” with questions from the consumer groups.
He said Veco may have incurred an increase in line rental charge by WESM which is the cost of transmission loss and cost of line congestion.
“The committee believes that the technical analyses explains why Meralco WESM price is low, – precisely because it did not incur high congestion cost and high line rental charges,” Archival said.
He said the Veco-WESM rate is high due to the high congestion cost and high line rental charges. “This is to be expected if the power source is very far from the load or customer,” Archival said.
Based on this explanation, Archival said Veco power rates will increase by 20 to 30 cents due to high WESM prices.
“Had Veco bought the power instead in Cebu or in Visayas, line rental charge could have been minimal and VECO power rates could have also reduced by more or less P0.70 per kwh like that of MERALCO,” Archival said.
He said Veco consumers are shouldering the power rate increase of P0.90 to P1.00 per kwh due to high line rental charge. “This figure matters not only to poor consumers but to all electricity users,” he said.
He said Veco filed before the ERC an application for the approval of the Interim Power Supply Agreement (IPSA) with 1590 Energy Corp. to supply 30 MW of power starting December 26 to June 25 this year.
The 1590 Energy Corp. power plant is located in Bauang, La Union in Luzon.
“The great distance between the source and the load, gives a high probability of congestion of the power flow. Line congestion cost results to high line rental charge for Veco when the power from the power source is unable (or limited) to flow towards its intended load, not to mention the big system loss charge inherent in a very far power source location,” the councilor said.
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He asked the ERC to inform the city through his committee about any application related to power and power supply contracts so they can look into the application themselves.
Archival also requested the House Committee on Energy in Congress to amend the EPIRA law to include a representative from the consumers group to sit as a member of the ERC to protect the interest of the consumers.