Business: Ceneco to Consumers: Brace for Series Cost Increases Estimated P0.80 (1)

The Corporate Planning Office of Central Negros Electric Cooperative, Inc. (Ceneco-CorPlan) last Saturday disclosed an estimated P0.80 increases more for

consumers to pay but subject to Energy Regulatory Commission approval, these will be stretched over a number of years and Ceneco wants consumers to be reminded of said series of increases in the near future.

The list of these series of future increases and will be passed on to consumers included, among others, pending applications-contracts filed before the Energy Regulatory Commission (ERC) by Independent Power Producers (IPP), i.e. Green Core and Kepco, some of these are ready for implementation, cost increasing factors charged by the Wholesale Electricity Spot Market (WESM) and the Power Sector Assets and Liabilities Management Corp. (PSALM).

Also in the list is the recent CENECO application before ERC for the implementation of its over/under recoveries under the "automatic cost adjustments and true-up mechanisms" and corresponding confirmation pursuant to ERC Resolution No. 16, Series of 2009, as amended by Resolution No. 21, Series of 2010 on March 26.

Grand total of all these passed on cost would amount to almost a billion peso but ERC as matter of policy had set a P0.10 ceiling for every item raised and will be stretched over a number of years to strike a balance between consumer welfare and industry viability.

First on the list is the "Must Run Unit" (MRU) of WESM which was incurred last February 16 to 23 congestion cost which was deemed failure of the National Grid Corporation of the Philippines (NGCP) and took them eight days to restore.

Ceneco incurred roughly P40 million passed on line rental cost which is about P1.46 to P2.00 per kwh last March causing the former to file formal complaint with the courts; details of this is yet to be disclosed.

WESM’s MRU is availed every time a congestion or transmission grid problem occurred; accordingly, WESM will run a particular generator company or IPP to compensate for said congestion but at a cost based on a generation price index (GPI) which is computed for each trading interval of the billing month.

Thus, for any billing month, there are twenty four (24) MRU generation prices, one for each trading hour of the day or using the language of the Philippine Electricity Market Corporation (PEMC) to Ceneco, untoward events causing transmission grid problem will be charged based on a particular "nodal price" usually at P0.12 per kwh.

Ceneco, on the other hand, is mandated to educate their consumers on such development particularly electricity cost increases.*

(Tomorrow: the passed on electricity cost to be charged by IPPs)