Meralco rates to go down this month

by Madelaine B. Miraflor October 6, 2016

http://www.mb.com.ph/meralco-rates-to-go-down-this-month/

Manila Electric Co. (Meralco) customers will be charged lower this month because of lower transmission and generation charges, which offset the increase recorded in some of the company’s billing components due to recent peso depreciation and higher fuel prices.

Meralco announced on Thursday that the rate for a typical household will go down this October by P0.1216 per kilowatt-hour (kWh), thereby bringing it down to P8.34 per kWh.

For a typical household consuming 200 kWh per month, the net adjustment would be P24.33, while those with an average monthly consumption of 500 kWh will save at least P60.82.

The downward adjustment was brought about by the overall decline in Meralco’s generation charge at P3.8938 per kWh.

“The decrease resulted mainly from lower charges from the Wholesale Electricity Spot Market [WESM] due to lower demand in September as compared to August,” Meralco said, adding that WESM rates declined by P1.47 per kWh.

The share of WESM purchases to Meralco’s total requirements now stands at 16.1 percent from 20.6 percent.

“This [decline in WESM charges] offsets increases in IPP [Independent Power Producer] and PSA [Power Supply Agreement] costs brought about by higher coal prices and the weaker peso against US dollar, from P46.58 to P48.50,” the company added.

Meralco explained that peso depreciation usually has an upward impact on the peso conversion of the dollar charges of the PSA and IPP plants.

The cost of power sourced from plants under the PSAs, which stood at 47.4 percent, increased by P0.3257 per kWh primarily due to higher fuel costs.

Coal price in the region continued to increase from US$52.85 per metric ton (MT) in June 2016 to US$67.41/MT in August 2016.

Mainly because of the weaker peso against US dollar, cost of power from the IPPs also increased by P0.1671 per kWh.

The share of the IPPs to Meralco’s total requirements for the September supply month was at 36.3 percent.

It was reported the other day that power rates in Manila for this month may likely go up as the result of the recent decline in Philippine peso and higher fuel prices.

“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 an earlier text message.

The downward rate adjustment this month came after the survey released last week by the International Energy Consultants (IEC) showing that Meralco’s average tariff (excluding VAT) has declined 28 percent since January 2012.

IEC is an Australia-based consulting firm specializing in Asian power markets.

In September, consumers consuming 200 kWh a month saw a reduction of P9 in their electricity bill after downward movement in the transmission charge offset a higher generation charge.