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MANILA POWER RATES – ASIA’S HIGHEST

By MYRNA M. VELASCO

Manila, Philippines – At an equivalent tariff of US$0.23 per kilowatt hour (kWh) or an average of P8.48 per kWh, the residential customers of Manila Electric Company (Meralco) are still consistently paying the highest electricity rates in Asia and the Oceania region.

This has been culled from the result of the 2011 independent survey undertaken by the Japan External Trade Organization (JETRO) on investment-related costs covering 31 major cities in the Asia-Oceania region. Aside from energy prices, it also tackled other investment-related costs such as wages, taxes, land prices and office rents, telecommunications expenses and other public utility rates.

So far, this is already the second survey by an international entity which ranked the Philippines having the most expensive electricity rates in Asia, the other one was based on 2010 figures by an Australian consulting firm. It was in that period that Manila residential rates surpassed Tokyo’s residential power rates of roughly $0.20 per kWh in the top spot.

The JETRO study differentiated the electricity rates for residential end-users (or general use) and the other for businesses. It emphasized though that it is Manila’s residential rates which are highest in the region; while the power rates for businesses at $0.12 to $013 per kWh are generally competitive with other countries, such as those in Beijing and Shanghai, China’s $0.12-$0.13 per kWh and Thailand’s $0.12 per kWh.

Ranking-wise, Meralco’s electricity rates for business could skid to 5th or 6th place, based on the ranges presented in the survey; while the highest rates in this category were Karachi (Pakistan) at $0.94, Phnom Penh (Cambodia) at $0.19 per kWh; and Singapore at $0.18 per kWh.

The electricity rates input in the JETRO study similarly noted the presence of peak and off-peak rates of the cities surveyed and it noted that the estimated rates still excluded basic charges. The seasonality of technologies being used for power generation had also been considered.

Next to Manila and Tokyo’s high residential power rates would be Singapore at $0.20 per kWh; Sydney (Australia) and Cebu (Philippines) at $0.19 per kWh; Colombo (Sri Lanka) at $0.18 per kWh; Mumbai (India) at $0.16 per kWh; Phnom Penh at $0.15 per kWh; Hongkong at $0.14 per kWh; Auckland (New Zealand) and Taipei (Taiwan) at $0.12 per kWh; Kuala Lumpur (Malaysia) and Karachi at $0.11 per kWh; Shenzhen (China) and Chennai (India) at $0.10 per kWh; and Jakarta (Indonesia); Shanghai and Guangzhou (China) and New Delhi (India) at $0.09 per kWh.

The Asian city residents paying the lowest electricity rates are those in Dhaka (Bangladesh) at $0.06 per kWh; followed by Seoul (Korea), Beijing (China), Batam (Indonesia) as well as Hanoi, Ho Chi Minh and Da Nang (Vietnam) at $0.07 per kWh. The next ones at $0.08 per kWh are Dalian, Shenyang and Qingdao (China); Bangkok (Thailand); Yangon (Myanmar); and Bangalore (India).

Energy Secretary Rene D. Almendras admitted that the country’s rates for residential consumers remained highest Asia-wide, hence, he noted the need for diversification of technology utilization in power generation as a means to eventually pull down prices.

“We need to diversify our energy sources, this will help bring down prices in the future,” he stressed, reiterating the Aquino administration’s promise to work on policies toward achieving that goal.

The energy chief similarly cited the lower rates cornered by Meralco in its new bilateral supply contracts “as a good starting point” in reducing power rates for its residential customers.

The same question on high electricity rates was raised at the Euromoney Investment Forum wherein Almendras was pressed on the policy directions that the government has been pursuing as this is seen as a “significant hindrance that must be overcome to encourage foreign direct investments to flock into the country in greater numbers.”

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