ERC, IEMOP, 3 DUs to tackle Bohol power rate woes in Manila

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ERC, IEMOP, 3 DUs to tackle Bohol power rate woes in Manila

Topic |  

The raging clamor of the almost half a million power consumers in the province to stop the sudden increase in power rates will reach the office of the Energy Regulatory Commission (ERC) in Manila on Wednesday.

A tripartite meeting among the three power distributors in the province, the Independent Electricity Market Operators of the Philippines (IEMOP) which is the market operator of Wholesale Electricity Spot Market (WESM) and the ERC will be convened at the ERC central office at the Pacific Center Building in Ortigas at 1:30 Wednesday afternoon.

In attendance during the meeting is Rep. Edgar Chatto under whose administration as governor commenced the discussion of the power situation in the province.

Engr. Ely Signe, manager of Bohol Light Co. who will be one of the attendees of the crucial meeting said power supply and its rates are a national mandate, thus are beyond the control of power distributors (DUs)  like BLCI and Boheco.


He said the DUs and government officials in Bohol will have to strengthen their lobby with the appropriate national agencies to intervene.

The local DUs are the two Bohol Electric Cooperatives (BOHECO 1 and BOHECO 2) and  Bohol Light Company, Inc. (BLCI).

According to them, the sudden increase in the electricity bill was due to the high prices in the Wholesale Electricity Spot Market (WESM).

This was particularly in the line rental fee of WESM as of May 2019 Preliminary Statement of the Independent Electricity Market Operator of the Philippines (IEMOP), which operates the WESM. An initial inquiry revealed that the sudden increase in WESM prices was caused by the capacity limitation of Leyte-Bohol interconnection submarine line.

What the local government can do is immediate lobbying with the concerned national agencies to intervene so that the WESM cost may be reduced.

During his first “Kita ug Ang Gobernador” forum with the media on Friday, newly installed Gov. Arthur Yap said they have to lobby since the concern cannot be addressed at the local level.


Last June 26, then outgoing governor and now Rep.  Chatto wrote to the Energy Regulatory Commission (ERC) and Department of Energy(DOE) to intervene. He similarly appealed to the IEMOP and National Grid Corporation of the Philippines (NGCP).


“This sudden increase in the generation charges of the WESM causes a huge increase in the electricity bills of the end-users/electric consumers, as the DUs have no other recourse but to pass on these charges to the consumers.

The increase in the electric bills of the consumers which reached as high as 90% to 100% has caused a public outcry in Bohol which cannot be left unheeded,” Chatto said in his urgent appeal letter.

Chatto raised the DUs’ apprehension that the power price hike for May and succeeding months will greatly affect the pass-through charges to the detriment of the Boholano consumers.


The BOHECO 1, BOHECO 2 and BLCI said this will also substantially affect the cash flow of each of them due to their existing billing collections which are lagging one month.

Chatto is in direct contact with DOE Sec. Alfonso Cusi and ERC Chairperson Agnes Devanadera.


WESM hike

The increases in the net settlement amount for the three DUs are summarized here based on the statement to them from the IEMOP:

BOHECO 1—January, P240,715; February 2.193 million; March, P9.192 million; April,
P24,047 million; and May, P79,116 million.

BOHECO 2—January, P10.908 million; February, P9.660 million; March, P8.495 million; April,
P8.669 million; May, P29.738 million.

BLCI (Bohol Light)—January, P7.367 million; February, P5.884 million; March P8,184 million;
April, P21.220 million; May, P46,203 million.

The three DUs themselves earlier asked the ERC, DOE, IEMOP, and NGCP other concerned agencies to intervene and reduce the WESM cost in favor of the consumers.

Chatto had copies of the DUs’ joint letter attached to his own letter to the same agencies.

The joint letter of the DUs was signed by BOHECO 1 General Manager Dino Nicolas Roxas,

BOHECO 2 General Manager Eugenio Tan and BLCI General Manager Eulogio Signe.

Chatto is still awaiting the appropriate and immediate responses from DOE Sec. Alfonso Cusi and ERC Chairperson Agnes Devanadera.

Hot to cut cost

To reduce the WESM cost, they asked the agencies for the following:

1. To fully utilize the 100 MW capacity of the Leyte-Bohol interconnection;

2. To revisit the formula used in the computation of Line Rental Fee as per WESM Rules; (In the case of the Bohol sub-grid, the Leyte-Bohol interconnection line has a capacity of 100 megawatts. However, as per applied WESM Rules, when the capacity of 85mws is reached, it will trigger a declaration of line congestion which will eventually signal the System Operator, which is the NGCP, to call all available generators that could ease congestion. Considering that the available generators connected to the Bohol sub-grid are diesel power plants, this will increase the nodal price in Bohol, thus, basically increasing the line rental fees of all DUs within the province based on the existing formula) If the applied formula will consider the technical realities and only the capacity in excess of the 85 MW threshold will be subjected to higher line rental fees, then it will be more justifiable;

3. To establish a cap mechanism for areas at the tail end of the grid;

4. To include in the considerations prior to dispatching the generators under the ASPA mechanism the following:

a. Ease line congestion cost of areas at the tail end of the grid-like Bohol. It should be the responsibility of the system operator to ensure reliable and stable electricity grid that will cater to the capacity requirement of its load. The reliability and stability of the grid were also cited in the Philippine Grid Code (PGC) where the system operator shall supply the load (DUs) in an N-1 reliability Criterion. In this connection with the Bohol sub-grid which is only supplied through the Leyte-Bohol interconnection, the criterion is violated;

5. To fast track the Cebu-Bohol Interconnection Project that will definitely reduce the nodal price of Bohol island upon project completion; and

6. To require the NGCP to furnish the affected DUs with its periodic update on the actual loading of the Leyte-Bohol interconnection submarine line, its effect, and related consequences. When the capacity is reached, the System Integrity Protection System (SPIS) will be activated. With the activation of the SIPS, line congestion will be avoided.

Parallel lobby 

Chatto and the DUs made their appeals also on behalf of the Bohol Energy Development Advisory Group (BEDAG). The former governor chairs the BEDAG, which members include the DUs.

In separate letters, Chatto asked Gov. Yap and Vice Governor Rene Relampagos to make a parallel follow-up with the concerned agencies. 

“We, together with the DUs, are making this urgent appeal to the ERC and other agencies to intervene in this extremely urgent matter. The Boholano public is thoroughly unaware of the reasons for this unprecedented increase and is, therefore, reacting intensely to this phenomenon,” Chatto told the agencies.

He said the Boholanos want “hopefully productive intervention” so that “this problematic a situation may be resolved as soon as possible.”

But even if electricity is a national mandate, Bohol province through BEDAG has its own ambitious energy development programs for reliable, sustainable and cost-efficient power supply.

These programs include the Cebu-Bohol interconnection and inland large-scale power plants, all still very much within their timeframes for implementation and completion as planned.

Because of the national mandate, even the process of NGCP connection from Cebu and putting up power generation facilities involve the ERC and DOE. (with reports from Ven rebo Arigo)


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