The power industry has recommended a suspension of the secondary price cap on the Wholesale Electricity Spot Market (WESM), staggered fuel price increases and suspending the value-added tax (VAT) and excise taxes on coal and oil to avert even more power rate hikes.
With the price of thermal coat hitting $446 per ton last March 3, power generators expect higher coal and fuel prices driving rates to the sky.
The Department of Energy (DOE) said it had met with power generators to explore ways to address the impact of higher costs.
But the Philippine Independent Power Producers Association (PIPPA) said their initial estimates indicate the price of fuel may drive rates to P9 per kilowatt-hour (kWh).
PIPPA members include SMC Global Power Holdings Corp.; Aboitiz Power Corp.; Semirara Mining and Power Corp.; First Gen Corp.; Quezon Power Philippines Ltd. Co.; AC Energy Corp.; TeaM Energy Corp.; Filinvest Development Corp.; and Meralco PowerGen Corp.
Suspend secondary price cap
The industry has recommended a suspension of the secondary price cap on the Wholesale Electricity Spot Market (WESM); staggered fuel price increases; suspending the value-added tax (VAT) and excise taxes on coal and oil; and relaxing the 30-day coal inventory requirement for generation companies to better manage their scheduling of coal deliveries.
The DoE told PIPPA it will bring the VAT and excise tax matter before the government’s economic managers at the National Economic and Development Authority-Economic Development Committee meeting today (March 7).
Pump prices increased for a ninth consecutive time last week: 90 centavos per liter for gasoline; 80 centavos for diesel; and 75 centavos for kerosene.
Since the start of the year gasoline, diesel, and kerosene prices per liter have risen by P9.65, P11.65, and P10.30, respectively.
‘Risky’ solution to power crisis
The decision by the government to incorporate nuclear power into the energy mix only shows the government’s failure to achieve energy security via building coal-fired plants and other power facilities running on fossil fuels, a sustainability think tank said.
President Rodrigo Duterte’s signing of an executive order (EO) authorizing a nuclear energy policy “makes no sense (because) the government is now entertaining as (a) solution one that will again put the lives of Filipino communities at risk. The entry of nuclear facilities and our vulnerability to calamities and disasters can easily lead to accidents,” Center for Energy, Ecology, and Development(CEED) Executive Director Gerry Arances said in a statement.
The EO is “a clear admission that decades of coal and other fossil fuels did not bring us energy security,” he said.
The President signed last Thursday EO 164, adopting a national position for nuclear energy, a go-signal for the government to begin exploring nuclear energy as a power source, more than a year after an interagency body submitted its recommendation.
Arances also said the move is untimely as Russia’s invasion of Ukraine has revealed how it can be bad for the country to rely on imported fuel, a scenario which also applies to nuclear energy.
He added that the prices of plutonium and uranium are likely to rise.
“It’s not wise to turn our energy sector more vulnerable than it already is to global shocks when we have an abundant supply of renewable energy just waiting to be developed,” he said.
Since its release, the EO has had a mixed reception, raising the prospect that the final decision to adopt nuclear energy has been kicked down the road to the next government.
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