DOE eyes cuts in universal charges in power bills

The Department of Energy is studying all options to lower the universal charge being passed on to consumers, as it sought to reduce the costs of electricity in the Philippines, currently the second highest in the region.

“This is one of the mechanisms that the DOE is considering to lower the price of electricity. We hope to come up with a win-win solution for all affected stakeholders,” it said.

Among the ideas that were earlier floated was to spread out the payments of charges over a longer period to help reduce the impact on consumers. Another idea was to tap the remaining Malampaya funds to help pay part of the amount being charged to consumers, which formed part of the universal charge component in a power bill.

So far, there are three universal charges reflected on a power bill: for stranded contract costs (19.38 centavos per kilowatt-hour); missionary electrification (15.61 centavos per kWh), and environment charge (0.25 centavo per kWh).

Stranded contract costs, which are being collected by state run Power Sector Assets and Liabilities Management Corp. (PSALM), referred to the difference between the contractual payment obligations and the revenue earned from the sale of the contracted energy for eligible, government-managed independent power producers (IPPs).

Missionary electrification refers to government projects to provide electricity to remote islands and far-flung, inland barangays that are not connected to any of the main grids. These projects are being undertaken by National Power Corp.’s Small Power Utilities Group.

Data from the DOE showed that as of May 31 this year, remittances of collecting entities (CEs) to PSALM amounted to P94.817 billion with interest earnings from deposits and placements of UC funds amounting to P147 million. For the first five months of the year alone, remittances made by collecting entities to PSALM reached P9.957 billion.

In a roundtable discussion with Business Inquirer, Energy Secretary Alfonso Cusi said bringing down the cost of electricity and ensuring adequate and stable supply were among the Duterte administration’s top priorities.