Stable electricity, prices and growth
ENERGY, INFRA AND ECONOMICS - Bienvenido Oplas Jr. - The Philippine Star August 14, 2025 | 12:00am
https://www.philstar.com/business/2025/08/14/2465256/stable-electricity-prices-and-growth
The most expensive water is no water. The most expensive food is no food. The most expensive electricity is no electricity. Blackout is ugly and discomforting, anti-business and anti-people.
I checked global data on power outages, I saw at the World Bank database, one item there is “Firms experiencing electrical outages, % of firms.” For Asia, latest data in 2024: China 3.7 percent, S. Korea 4.7 percent, Malaysia 22.3 percent. Latest data 2023: Singapore 0.1 percent, Hong Kong 3.9 percent, Indonesia 12.7 percent, Vietnam 43 percent, Philippines 43.9 percent. Latest data 2022: Bangladesh 71.4 percent, India 19.9 percent, Saudi Arabia 2.7 percent. No data implying incidence of power outages is zero are Japan, United Arab Emirates, Qatar.
For America and Europe, latest data in 2024 unless specified: Canada 31.4 percent, US 25.2 percent, Belgium 33.5 percent, Sweden and Turkey 32.7 percent, Spain 18.8 percent, UK 14.3 percent, Italy 9.6 percent. France 29.5 percent (2022), Mexico 28.4 percent (2023), Germany 21.3 percent (2022).
It is surprising to learn that one-fourth of US firms have reported power outages, nearly one-third in Canada and France. In Philippines and Vietnam, more than two-fifth while only less than one-twentieth in China, Korea and Hong Kong.
Causes of power outages or fluctuation can come from generation (insufficient supply), transmission, distribution problems. Our power system should have resilience in these three sub-sectors of energy.
Last week Aug. 7, I attended the Energy Regulatory Commission turnover ceremony between outgoing chair Monalisa Dimalanta and incoming chair Nino Juan. Then we proceeded for the press conference.
During the question-and-answer session, I asked Mr. Juan: “As a consumer, I prefer stable electricity, no blackout even at higher prices because blackout means our refrigerator, aircon, lights can easily be damaged, will have to use candles, risky for fires. Another consumer wants cheap at all cost even with unstable supply, that if prices go up, ERC should impose price control, like the existing secondary price cap at WESM, and even a tertiary price cap if possible. Between the two of us, whom will you take side?”
Chair Juan nodded then replied that we need balance. There are many factors from the generation to transmission, distribution side that affect prices but we need stable electricity. He added that in off-grid areas like islands where people rely on gensets and Napocor’s SPUG, many consumers are willing to pay high just to have no blackout, P11 or P12/kwh in generation alone.
Recently there were lots of reports and stories about many electric cooperatives (ECs) having rates that are “cheaper than Meralco,” the National Electrification Administration (NEA) released the numbers as NEA is the main political protector of ECs, giving them lifeline money and subsidies for their losses and wastes and money taken from taxpayers.
Even assuming that the NEA narrative is true, price is a secondary factor for the welfare of consumers, power stability is their primary concern. Last Saturday I was in western Pangasinan, blackout there 6 a.m. to 6 p.m., many people were outside their houses because there was no light, no electric fan or aircon inside. Many coffee shops, convenience stores were closed, no aircon and lights. Blackout is ugly.
The ERC produces two important metrics (among many) that measure power stability or instability: the system average interruption duration index (SAIDI) measured in minutes in a year, and the system average interruption frequency index (SAIFI) measured how many times in a year a power interruption occurs. The lower the index, the better, the more stable the power supply is.
I took two metrics, scheduled maintenance and power supply or grid-related outages like supply deficiency, plant tripping, transmission maintenance, etc. I compare the performance of private distribution utilities (DUs) like Meralco with ECs in the same province or geographical area.
For scheduled maintenance in 2023, Meralco’s SAIDI was 51 minutes while Batangas EC (BATELEC) 1 was 257 minutes (or 4+ hours) and BATELEC 2 was 1,386 minutes (23 hours). In SAIFI, Meralco’s was 0.3 while BATELEC 2’s was 6.3.
For power supply, Meralco’s SAIDI was only 26 minutes while BATELEC 1’s was 2,676 minutes (47 hours or nearly two days) and BATELEC 2’s was 1,819 minutes (30 hours). In SAIFI, Meralco’s was only 1.4 while BATELEC 1’s was 10.7.
At these numbers, even assuming true that BATELEC 1 and 2’s prices are cheaper than Meralco, the damage to appliances and food in the ref, the inconvenience of enduring candles and heat, the high cost of running gensets, the cost of businesses shutting down for several hours in a day or a week are much higher.
In Cebu, the private DU Visayan Electric Co. (VECO) SAIDI in 2023 for scheduled maintenance was 163 minutes (nearly 3 hours) while Cebu EC 1 (CEBECO 1) was 1,761 minutes (29 hours). In power supply, VECO’s SAIDI was 7.6 minutes while CEBECO’s was 311 hours (5 hours). And VECO’s SAIFI was 0.5 while CEBECO’s was 4.4.
NEA is a costly bureaucracy. In 2020, it received P12.87 billion subsidy, most of it given to wasteful or losing ECs. That year, the mother agency Department of Energy (DoE) received only P1.32 billion, ERC received P0.58 billion. In 2024, NEA received P3.02 billion while DOE got P2.61 billion and ERC got P0.91 billion.
NEA should go and spare the taxpayers of continued subsidy yearly. All ECs should become corporations, monitored by SEC and not NEA.
Meanwhile, I will attend the AmCham 8th Annual Energy Forum today at Marriott Hotel, Newport Pasay City. The theme is comprehensive, “Navigating Conventional, Renewable, and Emerging Technologies and Developments in Achieving Energy Security” and among the speakers are Energy Secretary Sharon Garin, Sen. Sherwin Gatchalian and Rep. Mark Cojuangco.
