EconomyEditor's PickCongress hears proposals for DUs, co-ops to invest in RE

September 20, 2022

THE House Committee on Energy heard proposals to incentivize distribution utilities (DUs) and electric cooperatives (ECs) to invest in renewable energy (RE) as a means of bringing down electricity prices.  

“There are several distribution utilities and cooperatives whose power service agreements are expiring this year or next two years with a lot of our generators heavily using coal; what DU or EC would want to enter a 10-year contract with coal and gas prices at all-time highs?” Nueva Ecija Rep. Rosanna V. Vergara said at a committee hearing on Tuesday. 

Ms. Vergara said very few generation facilities are currently offering renewable energy.

“I agree that the most expensive power is no power but P20 per kilowatt hour is also not acceptable; this is a challenge that the committee will have to face in the short term,” Ms. Vergara said.  

Ranulfo M. Ocampo, president of Philippine Electric Plant Owners Association said that stranded contract costs are addressed by a Department of Energy (DoE) circular on the conduct of the Green Energy Auction program.

“Under this program, the DoE will conduct the bidding process to procure renewable energy for the market,” Mr. Ocampo said.

Mr. Ocampo said generation costs are too high due to the Philippines’ dependence on imported fuel.

“It will take time for us to transition to cleaner and more indigenous power, as the market shifts to local and cleaner sources,” Mr. Ocampo said.

Jose Ronald V. Valles, Manila Electric Co. head of regulatory management, said that the price of electricity has actually fallen as a result of the Electric Power Industry Reform Act.

Ms. Vergara disputed this claim, saying power rates remain high.

“Whenever they talk about why our country is unable to attract foreign direct investment, (power) is always one of the reasons… and this is a fact,” Ms. Vergara said. — Ashley Erika O. Jose

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