Energy Secretary Raphael Lotilla said how improved transmission infrastructure, like the Mindanao-Visayas Interconnection, can reduce electricity bills as it already reduced spot market prices by up to โฑ2 in Luzon, โฑ1.77 in Visayas, and โฑ1.30 in Mindanao.
But before you get too excited, hereโs the catch: these savings donโt directly translate to lower electricity bills for most consumers.
Why? Because electric cooperatives source only a fraction of their energy from the volatile spot market, relying instead on fixed power supply agreements with generation companiesโthe source of your billโsย generation charge.
The Role of Transmission and Generation Costs
Electricity bills are shaped by two key components:ย generation chargesย (the cost of producing power) andย transmission costs (the expense of delivering that power to your home). Transmission costs make up just 3.1% of your bill, according to Maharlika Investment Corp. (MIC) president Rafael Consing Jr. These costs play a critical role in keeping the lights on.
Lotilla emphasized the importance of the National Grid Corporation of the Philippines (NGCP) and its high-voltage transmission lines, which connect power plants to consumers.
โWithout these lines, power plants cannot deliver electricity to the grid effectively,โ he said. In other words, no transmission lines, no powerโno matter how much energy is generated.
The Maharlika Fundโs First Big Move: Investing in NGCP
A year and a half after its creation, theย Maharlika Investment Fund (MIF)ย has made its first major investment: acquiring a 20% stake in NGCP. The government hopes this move will improve transmission infrastructure, foster competition among power suppliers, and ultimately lower electricity costs.
But when will consumers see the benefits? Thatโs the million-dollar question.
Lotilla admitted itโs too early to predict exact timelines or savings.
โWe canโt give you any exact date or amount of reduction,โ he said. Consing echoed this, explaining that improved infrastructure could allow more power players to join the grid, increasing supply and potentially driving prices down. โAs youโve got more supply coming inโฆ at some point in time, [prices] will come down,โ he said.
Renewable Energy Goals and Long-Term Savings
The government is also banking on this investment to support its ambitious renewable energy targets: 35% of the power mix by 2030 and 50% by 2040.
Consing believes that upgrading NGCPโs infrastructure will help integrate more renewable energy sources, which could reduce costs over time. But again, the timeline remains unclear.
Whatโs Holding Back Immediate Savings?
The NGCP investment is a step in the right direction. But several factors will determine its impact on your electricity bill:
- Location, Location, Location:ย Savings will vary depending on where you live and how your local distribution utility sources its power.
- Existing Contracts:ย Many utilities are locked into long-term supply agreements, which may delay the benefits of increased competition.
- Infrastructure Rollout: The pace at which NGCP completes its transmission projects will also play a crucial role.
What Can Electricity Consumers Expect?
For now, the Maharlika Fundโs investment in NGCP is a promising move toward modernizing the countryโs energy infrastructure and fostering competition in the power sector.
However, donโt expect an immediate drop in your electricity bill. The government remains optimistic but has yet to provide concrete figures or timelines for potential savings.
In the meantime, consumers can only hope that these investments will eventually lead to a more reliable, affordable, and sustainable energy future. Until then, keep an eye on your billโand maybe consider solar panels if youโre looking for faster savings.
