By Lenie Lectura - August 6, 2017
THE generation charge component of Manila Electric Co. (Meralco) consumers’ electricity bill is expected to go up by a few centavos this month.
Generation charge covers the cost associated with Meralco’s purchase of power from its suppliers—independent power producers (IPPs), power producers with power supply agreements (PSAs) with Meralco and power producers using renewable energy (RE) and the Wholesale Electricity Spot Market (WESM).
During a forum at the editorial office of the BusinessMirror, Meralco Spokesman Joe Zaldarriaga said generation charge could go up anywhere between six centavos and 10 centavos.
“Although spot prices registered a reduction, we see generation costs as having a slight upward movement of probably around six centavos to 10 centavos mainly due to higher fuel costs,” Zaldarriaga said.
Overall generation charge also increased slightly last month by P0.0799 per kilowatt-hour, from P3.8586 per kWh in June to P3.9385 per kWh in July, mainly due to higher IPPs and WESM charges.
Zaldarriaga added the August overall power rates reflect the last three-month installments of the refund of over-recovery on pass-through charges from January 2014 to December 2016, totaling around P6.9 billion.
“This will be the last of the said refund. Thus, we are definitely looking at an increase in September rates,” he said.
On May 11 the Energy Regulatory Commission (ERC) granted Meralco’s petition for refund for implementation from June to August this year. The refund is not shown as a separate line item in the electricity bill but is embedded in the different pass-through charges indicated in the bill, which include generation, transmission, and system-loss charges, and lifeline and senior citizen subsidies. For residential customers, the refund translates to a reduction of P0.79 per kWh, excluding taxes.
During the forum, Meralco Utility Economics head Lawrence Fernandez said one of the main reasons power rates in the Philippines are among the highest in the region is the absence of government subsidies for electricity.
“Based on a study, Philippine power rates are cost reflective. This means that it reflects the true cost of generation, transmission and distribution. Unlike in other countries, such as Indonesia, Thailand and Malaysia, where the government subsidizes electricity costs,” he said.
Fernandez added that, based on the same study, “reflecting the true cost of electricity is an economically sound policy”. Zaldarriaga said other countries no longer want to subsidize electricity rates because it is not feasible in the long term to do so.
Meanwhile, Meralco has, so far, registered 65,000 users of its prepaid electricity service.
Meralco Head for Marketing and Customer Solutions Jose Antonio Valdez said the numbers are very encouraging, as more consumers are becoming budget conscious.
“We now have 65,000 prepaid electricity customers. Every month, we add about 5,000 to 7,000 new customers,” he said. The company is targeting to register 100,000 users of its prepaid-electricity service, dubbed as “Kuryente Load” (KLoad), by the end of the year.
The service is available in select areas in Makati, Manila, Pasig, Mandaluyong and Rizal. It will expand the coverage of the service in Marikina, Caloocan, Quezon City, Pateros, Pasay, San Juan and Taguig within the year.
The KLoad service runs on the latest “smart” meters and can detect outages instantly, allowing for faster restoration. The prepaid-meter system allows customers to monitor their electricity consumption, giving them control over consumption and spending.
Based on research from actual consumer usage, customers who shifted from postpaid to prepaid are able to effectively monitor their consumption daily via text- messaging service. As a result, they can save an average of 20 percent on electricity consumption, translating to total savings of around P300 per customer.