Gov't subsidies, transparency are gateway to lowering Philippines expensive electricity prices

Gov't subsidies, transparency are gateway to lowering Philippines expensive
electricity prices

PRESENCE OF GOVERNMENT SUBSIDIES AND GREATER TRANSPARENCY IN UNBUNDLING
ELECTRICITY RATES ARE MAJOR SOLUTIONS TO LOWERING DOWN EXPENSIVE POWER RATES
IN THE PHILIPPINES, ACCORDING TO THE LATEST DOE (DEPARTMENT OF ENERGY)
REPORT.

In the recently published Power Development Plan 2017 to 2040, the
Philippines has one of the highest electricity tariffs in Southeast Asia as
of end-2016, posting an average industry rate of P5.84 per kWh.

The country also accounts for having outstanding commercial and household
rates of P7.49 per kWh and P8.90 per kWh, respectively.

These soaring prices, DOE said, is the effect of lack of government
subsidies to levy the power sector in all levels including taxes, fees, and
miscellaneous charges, that make up energy rates nationwide.

"Thailand, Indonesia, and Malaysia arguably have subsidies. In addition,
taxes, fees, and other charges are also levied on the power industry sectors
composed of the generation, transmission, and distribution levels which
constitute a portion of electricity rates in the Philippines," DOE said.

But on a lighter note, the government viewed this concern as a gateway for
"greater transparency" in looking into the country's high electricity
tariffs.

"Greater transparency of having reasonably-priced electricity rates through
more unbundling of items in the energy supply chain remains part of the
major thrusts of the DOE, its attached agencies, and the Energy Regulatory
Commission," DOE added.

In a study conducted by International Energy Consultants (IEC) last year, an
Australian consulting firm, Manila Electric Co. (Meralco) was found the
third top-ranking electricity distributor in Asia, fourth in the Asia
Pacific, and 16th in global ranks.

Meralco moved from second to third based on IEC's survey after its average
rates, excluding taxes, went down by 28 percent from January 2012 to January
2016. This is mainly due to the electricity retail's reduced distribution
fees, lower system loss, and sourcing strategies.

Overall, there is an average decline of 19 percent across 44 countries
during the four-year period due to the continuous decrease in power
generation and fuel costs, IEC said.

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Link to Original Article:
http://powerphilippines.com/2017/08/30/doe-govt-subsidies-transparency-ph-el
ectricity-rates/

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John Diecker
APT Consulting Group Co., Ltd.

www.aptthailand.com