Water utilities are highly dependent on energy, particularly in electricity, to pump, treat, and distribute potable water. Fluctuating fuel prices and the gradual increase in electricity tariffs are some of the contributing factors to the rising operational costs of our agency.

These costs directly affect our key operational activities, such as groundwater extraction and water treatment processes which have been impacted by this upward energy trend.

It can be noted that PPCWD has not implemented any water rate increases in the past 14 years. However, based on our Monthly Data Sheet/FS for 2015 and 2024, there is a substantial increase in power costs production per cubic meter of water compared to 2015.

In 2015, the average electricity rate was ₱ 9.00 per kWh. Currently, the electricity rate has risen to ₱ 14.88 per kWh.

The diesel fuel cost, which is also part of our energy consumption as backup power for our diesel generators in all water facilities, poses a challenge to this energy trend. In our proof of billing records, the 2015 fuel price for diesel was ₱ 55 per liter, in August 2024, it rose to ₱ 65.15 per liter in average.

Without any adjustments to the water tariff in relation to the energy trends, it presents a financial strain on PPCWD. The significant increase of ₱ 5.88 per kWh and ₱ 10.15 per liter of diesel between these years correspond to an increase of ₱ 4.4 to produce one cubic meter, from an average of ₱ 2.95 per cubic meter in 2015 to ₱ 7.35 cubic meter in August 2024.

Without a proper adjustment to the power costs that aligns with the current energy price trends, this could compromise PPCWD’s ability to expand projects and extend our service coverage in the coming years.

The proposed Power Cost Adjustment (PCA) is based on the guidelines, provided by the Local Water Utilities Administration (LWUA). The computed Power Cost Adjustment for 2024 is at least 5.32 per cubic meter. This amount reflects the necessary adjustment to align with current energy costs.

Note that these adjustments were not affected by an increase in manpower, interest rates, treatment expenses, water rate increase (2010), or any factors affecting our operating expenses. This computation is solely with the power cost to produce a cubic of water.

In light of the sustained and gradual increase in electricity and fuel costs from the previous years and without the implementation of any increases and adjustments, the vital role of these energy sources in PPCWD’s ability to expand, we recommend and approved by the Board of Directors with a Resolution No. 08-24-150, proposing a Power Cost Adjustment of ₱ 2.50 per cubic meter.

This adjustment covers the balance between covering the rising energy expenses while minimizing the financial burden to the public.

The PPCWD invites all consumers to attend the public hearing scheduled on November 14, 2024, at Edward S. Hagedorn Coliseum. Discussion for the justification and rationale, and how this works in our water bill of the Power Cost Adjustment will be presented during this activity from 1:00 PM to 5:00 PM. Our consumers will be heard in this activity, including their sentiments and opinions about this adjustment to our decision-making.

Overall, the proposed adjustment is still subject to review and approval by the Local Water Utilities Administration.

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