by Madelaine B. Miraflor October 4,
2016 (updated)
Power rates this October may likely
go up due to the twin effects of the decline in the value of the Philippine
peso and higher fuel prices but power distributor Manila Electric Co (Meralco)
say the lower prices in the Wholesale Electricity Spot Market (WESM) could
temper the uptick.
“While there is an upward price pressure due
to higher fuel prices and the peso’s depreciation, we [Meralco] have observed
that spot market prices were lower in September versus the preceding month,”
Meralco senior vice president and head of utility economics Lawrence Fernandez
said in a text message.
Fernandez said Meralco will announce
(Thursday) the final generation charge for the month of October.
“We are still collating billing data,” he noted.
“We are still collating billing data,” he noted.
Fernandez already said before that
one factor that may lead to higher power rates is the increase in coal prices,
which will also put pressure on generation costs.
“After two successive reduction of
overall electricity rate to households, we saw that electric rates declined to
record lows. Now, we are seeing that there are certain factors that will put
pressure on generation cost,” Fernandez said in a previous report.
“Second, we noticed increases in
coal price. If this continues, there’s a possible effect to the generation
charge,” he added.
Bulk of Meralco’s power sources
largely comes from natural gas at 46.2 percent, while coal at 37.1 percent.
At the same time, Meralco also purchases some of its supply from WESM, with the rest coming from Independent Power Producers (IPPs) and Power Supply Agreements (PSA).
At the same time, Meralco also purchases some of its supply from WESM, with the rest coming from Independent Power Producers (IPPs) and Power Supply Agreements (PSA).
The Philippine peso slumped to fresh
seven-year low more than a week ago when it fell to P48.50 to US dollars.
It was already reported earlier that such depreciation will definitely put pressure on Meralco’s generation charge. John Morris, head of Tariff Report of International Energy Consultants, said if the currency depreciates, the fuel tariff usually increases.
It was already reported earlier that such depreciation will definitely put pressure on Meralco’s generation charge. John Morris, head of Tariff Report of International Energy Consultants, said if the currency depreciates, the fuel tariff usually increases.
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