CEBU
CITY, January 22 (PIA) --- As oil prices continue to drop, the public
also anticipates a significant reduction in electricity rates but this does not
necessarily follow, bared Engr. Dennis Verallo, head of the Utility Department
of the Visayan Electric Company (VECO).
Verallo said that in the case of VECO, the oil price slump has
only a slight impact as the oil-based component in the power generation rate is
only 3.5 percent of the total electric bill.
According to Verallo, they get their power sources from companies
engaged in geothermal, coal-fired power plants or obtain it based on cheapest
rate from the Wholesale Electricity Spot Market, the trading floor for
electricity.
“In fact, since January last year, we have reduced the
generation rate to almost P1 from P6/kwh down to P5.15/kwh this year,” said
Verallo during the recent forum of the Association of Government Information
Officers (AGIO-7).
Engr. Saul Gonzales, chief of the Energy Industry Management
Division of the Department of Energy - Visayas (DOE-Visayas) on the other hand,
said the major source of power in the Visayas is the Tongonan, Leyte geothermal
plant.
“Almost 60 percent of our power in the Visayas is from geothermal
source,” said Gonzales, adding that coal is the second main source.
“Huge drop in oil prices does not really impact so much on
power rates,” said Gonzales not unless one’s consumption of fuel is massive.
Power rates to increase
But VECO’s petition for a power rate hike has just been approved
by the Energy Regulatory Commission (ERC) in order to recover its P78 million
investment in its underground cabling project which started late last year.
The initial project phase covered from the Cebu Provincial Capitol
to Fuente Osmeña Circle while Phase II will start anytime this year.
Verallo however said the power rate increase, which is yet to be
implemented, is very minimal at P0.001 per kilowatt hour.
But starting February, VECO will implement a power rate increase
of four centavos per kilowatt hour as mandated by the ERC under the
feed-in-tariff allowance (FIT-ALL) for renewable projects.
Verallo said all power utilities need to pass on the FIT-ALL to
electric consumers. The amount generated by the FIT-ALL will be given as
incentives by the government to renewable energy (RE) players for them to
invest in alternative energy sources like solar, wind, hydro and biomass.
Gonzales meanwhile, said all power utilities under the law are
required to utilize RE sources of about 10 percent.
The DOE-Visayas official further said Cebu has ample power supply
until 2016 with new investments on coal-fired power plants. (rmn/fcr/PIA-7)