Rate Stabilization Amidst Global Coal Price Decline
In a significant development, the Energy Regulatory Commission (ERC) notes a stabilization in generation rates for 2023 due to a decline in global coal prices, with rates dropping below P7 per kWh.
22.12% Decrease in Average Generation Charge
The average generation charge, a pivotal component of monthly electricity bills, witnessed a notable 22.12% decrease, falling to P6.97 per kWh in November from P8.95 per kWh the previous year.
ERC’s analysis highlights a conspicuous drop in the New Castle Coal Price Index, a key indicator for thermal coal prices. Despite global coal prices plunging, local rates show a slower decline.
Cautious Optimism Amidst Macro-Economic Factors
ERC Chair Monalisa Dimalanta, while acknowledging the stabilization, emphasizes the influence of macroeconomic conditions on the slower decline, exercising caution in projecting continued rate reductions in 2024.
The looming El Niño weather phenomenon raises concerns about increased demand, potentially offsetting the downward trend in rates. Additionally, the entry of new liquefied natural gas (LNG) plants adds logistical complexities and global LNG price fluctuations to the equation.
Prospects for 2024: Monitoring LNG Influence
As the Philippines navigates 2024, the ERC closely monitors the impact of LNG plants on generation rates, recognizing potential shifts in the energy landscape and emphasizing the need for vigilant observation.
Source：business.inquirer.net
