DOE: Declining power rates with lower demand, fuel prices

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The Department of Energy (DOE) reported that electricity rates are slowly decreasing as demands drop following the decline in prices of the type of fuel sourced by power distributors.

In a report by the Business Mirror, the energy department reported a change in the average power rate. In March, the average was Php 13.61 per kilowatt hour (kWh), which dropped to Php 12.51 per kWh in April and Php 12.05 per kWh in May. 

It went up to Php 12.26 per kWh in June and continued its decrease in July to Php 11.69 per kWh and further dropped to Php 11.15 per kWh in August.

In addition to the fact that summer is coming to a close, DOE Undersecretary Rowena Cristina Guevara also noted that lower prices for fossil fuels like coal and natural gas are also contributing factors to the declining electricity rates. 

The lowest rate achieved during the first half of this year was recorded in August as Luzon’s power rate declined to Php 10.92 per kWh. Visayas and Mindanao also experienced a decline at Php 11.44 per kWh and Php 11.20 per kWh, respectively. 

Guevara also reported that the Energy Regulatory Commission (ERC) issued a database of electricity rates. Consumers are encouraged to view it to learn and understand how their particular distribution utility is performing.

The same data also showed that the average power rates for distribution utilities (DUs) were lower than those for electric cooperatives (ECs). From March to August, DUs charged rates of Php 11.98 per kWh, Php 11.35 per kWh, Php 10.92 per kWh, Php 11.46 per kWh, Php 10.48 per kWh, and Php 10.24 per kWh.

ECs, on the other hand, had rates of Php 13.85 per kWh in March, Php 12.67 per kWh in April, Php 12.19 per kWh in May, Php 12.36 per kWh in June, Php 11.81 per kWh in July, and Php 11.28 per kWh in August during the same period.

This may be a result of the fuel type that DUs and ECs obtain from their power suppliers. Given that DUs are subject to a power supply agreement, the cost of generating electricity determines the price of electricity, Guevara said. 

In terms of energy demand, the total final energy consumption (TFEC) in 2022 increased slightly from its level of 35.1 million tons of oil equivalent (MTOE) in 2021 to 35.9 MTOE. 

The most energy-intensive major economic sector is transportation, with a 34.4% share, followed by residential with a 28.8% share.

The total oil demand, including non-energy and fuel used in the production of electricity, rose from 17.7 MTOE in 2021 to 18.3 MTOE in 2022. The increase in oil use in the manufacturing industry and power plants was credited for this.