Meralco generation charge up in August

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TUESDAY, 07 AUGUST 2012 21:37 PAUL ANTHONY A. ISLA / REPORTER

HOUSEHOLDS might have to brace for another increases in Manila Electric Co.’s (Meralco) generation charge this month.

Meralco, the country’s largest power retailer, said on Tuesday its generation charge would go up by P0.28 per kilowatt-hour (kWh) to P6.7397/kWh this month from P6.4549/kWh in July.

It attributed the increase to the eight-day shutdown of the Malampaya pipeline last month that affected the 1,200-megawatt (MW) Ilijan, 1,000-MW Sta. Rita and 500-MW San Lorenzo natural gas power plants.

Meralco said it does not earn from the generation charge. Payment for the generation charge—a pass-through cost for Meralco—goes to state-owned National Power Corp. (Napocor), independent power producers (IPPs) and generators selling through the Wholesale Electricity Spot Market (WESM).

Its charges only account for about 16 percent of the total electricity bill.

Meralco said the Ilijan power plant had to temporarily reduce operations due to the shutdown. The plant’s limited operations resulted in Meralco drawing more of its power requirements from the WESM.

According to the power utility, it sourced 12.6 percent of its requirements from the WESM in July from 6.3 percent in June.

Meralco said power rates at the WESM stood at P14.70/kWh and remained to be most expensive source of supply.

Without fuel from Malampaya, Meralco said the Sta. Rita and San Lorenzo natural gas power plants utilized more expensive liquid condensate fuel to ensure continuity of generation supply to Meralco.

The utility said Quezon Power Philippines Ltd.’s coal-fired power plant also experienced a number of outages that resulted in a reduction in its dispatch.

As a result, Meralco said, the generation cost from the IPPs increased by P0.48 centavos to P5.58/kWh. The independent power producers supplied 45.6 percent of the utility’s power requirements in July.

Charges from the Napocor, which shifted to cheaper wet-season rates in July, decreased by P0.66 to P4.99/kWh. Napocor accounted for 41.7 percent of Meralco’s power requirements.

With better supply conditions this month and with Malampaya and the affected power plants back online, and barring generation disruptions from the other large power plants, it is probable that the generation charge will be more favorable next month.     source