Electric Bill Gone Amuck

The electric bill for the past months has gone wayward. It continuously skyrockets to this day to the upper limit of consumers’ affordability and tolerance. Many are enraged with the amount they pay—which suddenly doubled—and the poor services they get in return.

Consumer groups are now planning to storm Casureco II reminiscent perhaps of the event in 2010 when then Mayor Jesse Robredo led the march to Casureco II headquarters for straightforward and transparent explanations regarding a similar soaring power rate being charged by the coop. At that time, Casureco II had the highest electric rate not only in the country for an on-grid power distributor but for the whole of Asia!

They should hold their horses though until all questions and issues are answered crystal clear by the coop.

Last Sept. 10, Congressman Gabby Bordado, Jr of the 3rd District of Cam. Sur called for a dialogue with officials of Casureco II in a hotel in Naga City. He wanted to get to the bottom line of this outrageous electric rate. Members of Naga City Media from Radio and TV (this writer represented the print) were present.

Casureco II officials stood up one at a time to illustrate and point out the main culprit of this very cataclysmic rate—the sudden hike in coal price, which was the main source of fuel used by its supplier—SMC Global Power to generate power. It is beyond Casureco II’s control, they explained clearly. It’s a pass-on cost, e.g. the amount that Casureco II buys from SMC-GP, is the same amount it sells to its consumers—nothing more, nothing less.

The cheapest form of fuel in power generation is coal. 70% of Luzon Grid is supplied by coal generating plants. Since the time of Pres. Ramos, the country built these power-generating plants aggressively. They are cheaper and faster to build compared to other plants such as geothermal or hydroelectric dams—both renewable forms of energy. Besides, Coal is abundant in supply although considered harmful to the environment and its use of it is currently banned in a couple of countries.

However, Electric Coops all over Luzon connected to the grid, including Casureco II contracted SMC-GP for their power supply disastrously suffer a very high cost of electricity when the price of coal became exorbitantly high all of a sudden. This happened when Russia waged war with Ukraine—the 3rd biggest supplier of coal, and Indonesia—the No. 1 producer in the world which partially banned mining it. These two unfortunate events happened almost simultaneously. As a result, countries dependent on coal for their power generation are faced with extremely tight supply. The law of supply and demand subsequently played and resulted in this exorbitant price increase.

These are reasonable explanations by Casureco II with supplementary explanations added here. But other issues brought up by this writer during the dialogue that may be contributory to the rate increase, which are within their control, were evidently circumvented with inconclusive generalized answers.

Issues like, was the Competitive Selection Process (CSP)—the bidding process for additional power requirement—done on time? Their answer was Casureco II couldn’t just offer open bidding, as it requires a lot of requirements (?) before it can be done, and its CorPlan Group is strategizing it, they said. The point was when did they prepare and submit the CSP for approval? Because failure or late submission of it will result in buying more from the Wholesale Electricity Spot Market (WESM), which sells power at a much higher price in a given time. It is reported that Casureco II is now buying 30% of its power requirement from WESM.

And, why is the System Loss (SL) of Casureco II not lower than 9% when big industrial and commercial users in its area coverage (malls, factories, rice mills, and the like)—which practically no SL by pilferages—consume a prominent percentage of its total Kwh sales? Neighboring Electric Coops have the same or lower SL than Casureco II without these big consumers.

Here is a simple example for better appreciation; in a certain coop, there are five (5) Barangays that consume 1.5MW but their revenue is only 1.275MW, therefore the System Loss (SL) of the coop is 15% (1.5MW-1.275MW=225,000KW; 225,000kw/1.5MW). If one (1) big establishment is built and added to that coop that consumes 3MW (with no SL/pilferage), the total SL of the coop is now reduced to just 5% (225,000KW/(1.5MW + 3MW); or, total KW lost over Total KW bought). Correspondingly, the same thing should happen to Casureco II’s SL.

In response, Casureco II attributed their present average marginal SL to the lengthy transmission lines of Tinambac/Siruma. They claim that the coop’s significant SL is associated with those lines. However, unless Casureco II shows the numbers that support that, it remains speculative in nature—how much KW was delivered and how much of it was sold in those two municipalities in relation to the TOTAL ITY of KW bought and sold by the coop in its entire area coverage will determine the Tinambac/Siruma SL impact on the TOTAL SL of the coop. Until this is bared, their answer remains unsubstantiated.

Lower SL than the current allowable benchmark means additional income to the coop and subsequently reduction in power rates. It can be minimal or it can be substantial, it depends on the operations of Casureco II.

With the welcoming attitude of the coop nowadays to constructive criticism and pertinent queries from consumers, it is expected that a positive response from the public and the Media in particular in its collaborative effort for a better Casureco II is easier achieved. Thanks to Cong. Gabby Bordado for initiating this event.

Casureco II will host the next round of dialogue next month.