World market, forex cause hike in residential electricity rates for July-Aug bills

·2 min read

THE price of fuel in the world market and the peso-dollar exchange rate have pushed residential electricity rates up by P0.65 for the July-August billing month of Visayan Electric customers.

The average rate for residential customers is now at P14.35 per kilowatt hour (kWh) or a P130 increase for customers with an average monthly electricity consumption of 200 kWh.

Prices of fuel products, such as coal, have been increasing mainly due to supply concerns because of the reopening of economies all over the world.

The ongoing Russia-Ukraine war, which caused import and export issues, also contributed to the high prices of fuel now that the demand for fuel has surged as economies are opening up after the coronavirus disease (Covid-19) lockdowns.

As of July 14, 2022, the price of coal in the world market has hit an all-time high at US$432 per metric ton. Coal is widely used by power generators to produce energy that powers our homes and industries.

Due to the high prices of fuel in the world market, the price of electricity in the Wholesale Electricity Spot Market (WESM) is also high since most of the power generators that sell power to WESM are either oil or coal-fired power plants.

"The power industry is driven by market forces and when the prices are high in the world market, this can really be reflected in our generation rates," explained Visayan Electric President and Chief Operating Officer Engr. Raul C. Lucero.

The rising peso-dollar exchange rates also contributed to the generation rate increase since fuel is an imported commodity.

Lucero stressed, however, that while generation rates are highly volatile and dependent on world market prices, Visayan Electric's distribution rate remains at P1.5992 per kWh, as approved by the Energy Regulatory Commission (ERC).

"Our electricity bills are driven by two forces -- rates and consumption. Rates, especially generation rates, are affected by world market prices and we cannot control that. What we can control is our consumption of electricity. During these times when the rates are high, we must be mindful of our use of electricity. The more we consume electricity, the higher our bill," he reminded customers.

Customers who wish to get in touch with Visayan Electric for inquiries may call its Customer Service Hotline 230-8326 or send a message to its official Facebook and Twitter pages. (PR)

Our goal is to create a safe and engaging place for users to connect over interests and passions. In order to improve our community experience, we are temporarily suspending article commenting