MORE Power awed Iloilo City with P3.55/kWh rate reduction
Last May, MORE Power reduced residential power rates by P0.551/kWh.
By July, residential consumers will receive P3.55/kWh decrease or P6.4562/kWh effective rate unlike June which was P10.0149/kWh.
The power utility successfully brought down rates by rearranging the generation mix to the favor of Ilonggo consumers.
More Electric and Power Corporation (MORE Power Iloilo) has announced another round of power rates reduction for Iloilo City consumers starting July.
Electricity users are expecting a P3.55/kWh decrease or from P10.0149/kWh for June to P6.4562/kWh this July, a rate foreseen to prevail until end of the year to first quarter of next year, said top executives of the power utility in a virtual press conference held July 22.
According to Roel Z. Castro, President and COO of MORE Power, this is by far the lowest rate that a distribution utility has offered to consumers based on his experience as a power industry executive in the last two decades.
Know more about MORE Power’s President and COO here: Roel Z. Castro: Modernization is a typical rhythm for this corporate leader
This is the second reduction from MORE Power in the short period of two months as result of its move to reconnect back Iloilo City to the Visayas power grid.
The sole power distribution utility inaugurated the 69-kilovolt transmission station in Brgy. Banuyao, La Paz last May 18 and it started to draw power from the grid in May 26.
The move immediately reflected a P0.551/kWh reduction for residential consumers and it decreased other charges like Generation Rate by P0.358 and Transmission Charge by P0.012.
Castro declared that they were expecting rates to further go down from that point forward.
Consumers to enjoy lower rates onwards
Although residential consumers are the major beneficiary of the decreased rates, other consumer classes will also get a reduction.
Electricity end-users under intermediate, commercial, power, city streetlights, city offices, and other government categories whose June rates range from P9.22 to P9.49/kWh will have a P3.310 reduction bringing their rates to P6.00/kWh this July.
The rate reduction is attributed by MORE Power from the substitution of major power sources between June to July as a result of its reconnection.
MORE Power demonstrated how the rates went down by showing the play of the generation mix for June and July as discussed by its Energy Sourcing Manager Karen Joy Elequin.
For the month of June, a pie graph showed by Elequin revealed that MORE Power sourced 77.01 percent of its power from Panay Energy Development Corp. (PEDC) followed by the Power Sector Assets and Liabilities Management Corp (PSALM) at 18.22 percent.
Minimal additional supply was provided by Panay Power Corp. (PPC) at P6.04 percent. The Wholesale Electricity Spot Market (WESM) played -1.77 percent.
With the reconnection to the grid becoming functional and adjustments undertaken, the July generation mix have showed that WESM now has -2.67 percent while 102.67 percent is now supplied by PSALM giving room for an over-supply that can be dispatched to the grid resulting to benefits to MORE Power in the form of reduced rates.
MORE Power rearranged supply to bring down rates
MORE Power has been looking at all angles where they can reduce the power rates of Iloilo City, Castro said.
But Castro is aware that one of the ways to reduce rates is to reconnect the utility to the grid.
Reconnection to grid offered MORE Power the space to rearrange the 70-30 percent generation mix that locks-in the utility with power suppliers.
The opportunity to exercise flexibility has presented itself with the gradual expiration of bilateral contracts between MORE Power and its power suppliers from February to May this year, offering an opening to shift power generation supply from private independent power producers to PSALM.
As illustrated by the pie graph, more than 70 percent of Iloilo City’s power requirement was supplied by PEDC, PPC, Aboitiz Power Renewables Inc. and KEPCO-SPC Power Corp. under a 1-year emergency power supply agreement as mandated by RA 11212, its franchise law.
Also check out: Low Electricity Rates for Iloilo City delivered by MORE Power
The previous generation mix arrangement only offered a 30 percent supply legroom for MORE Power to source from the grid making rate reduction difficult to deliver to consumers.
By rearranging the generation mix, MORE Power was able to bring down rates.
Additional factors that brought down rates
MORE Power also reported that there were also other factors that resulted in reduced rates because of improvements on efficiency, reliability and reduction of illegal connection.
Among the factors it mentioned is the “decreased availment of subsidies by lifeline consumers.” Lifeline consumers or lifeliners are electricity end-users whose monthly electricity consumption does not go more than 100/kWh.
Castro also mentioned “increased number of metered residential consumers” from 62,000 to around 83,000 today as a result of its inclusion campaign to legitimize the neglected marginalized or informal sectors who have been wanting to become a metered power consumer.
These were actions undertaken by MORE Power which complemented in the two rounds of reduction for Iloilo City.
“We are hoping to sustain this development for the long term as we have assured the Ilonggo consumers that we are serious and sincere in looking for the best rates for Iloilo City,” said Roel Z. Castro during the press conference.
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