Iloilo city: Higher generation and transmission charges driven by tight power supply and transmission constraints in the Visayas grid pushed up electricity rates in Iloilo City this month, according to More Electric and Power Corp. (MORE Power).

According to Philippines News Agency, the residential electricity rate rose by PHP0.4389 per kilowatt-hour (kWh) to PHP14.349 per kWh in July from PHP13.91 per kWh in June. The commercial rate also increased to PHP13.48 per kWh from PHP13.04 per kWh.

For residential consumers, the generation charge posted the biggest increase at PHP0.33 per kWh, followed by transmission at PHP0.091 per kWh, system loss at PHP0.0028 per kWh, and government taxes and other charges at PHP0.0166 per kWh.

MORE Power spokesperson Angel Tan said Tuesday the Visayas grid has been placed under a yellow alert in recent weeks because of limited power supply. "Overall, more than 1,000 megawatts of electricity is lost due to derated capacities and forced outages of power plants. Once there is not enough supply of power, what happens is that automatically the price in the market will increase," she said.

Tan explained that MORE Power maximized its bilateral supply contracts with power generators and sourced only about 33 percent of its electricity requirements from the Wholesale Electricity Spot Market (WESM) to cushion the impact of higher market prices. Without those bilateral contracts, she said, electricity rates would have been higher.

The average WESM nodal price climbed to PHP14.67 per kWh from PHP10.36 per kWh. MORE Power has requested that the increase be implemented over six months. Tan said the utility expects power supply to stabilize with the expected resumption of operations of at least one power plant by late July or August.