Power rates to remain stable in September, says Meralco

By Lenie Lectura - September 3, 2018

https://businessmirror.com.ph/power-rates-to-remain-stable-in-september-says-meralco/

THE Manila Electric Co. (Meralco) expects power rates in September to remain stable, an official said on Monday.

“Right now, we expect the movement of September power rates to be stable or flattish,” said Meralco Head of Utility Economics Lawrence Fernandez in a text message.

The utility firm has yet to release the final figures. “We are still waiting for bills from power suppliers, but the official announcement will definitely be within this week,” added Fernandez.

Compared to the July supply month, the Meralco official explained that power demand and plant capacity on outage in Luzon grid have been lower on the average in August. Power rates for the supply month of August are reflected in September.

Fernandez noted that there could be a slight redcution in rates if the improvement in the Luzon grid’s supply situation translates to lower Wholesale Electricity Spot Market  prices this month. “Hopefully, lower WESM prices will offset any impact of peso depreciation,” he added.

Meralco reported last month that power rates in August went up by P0.0265 per kilowatt-hour to P10.2190 per kWh as generation charge inched up during the July supply month.

The slight increase in overall electricity rates resulted in an upward adjustment of around P5 in the power bills of a typical household consuming 200kWh.

Generation charge, which makes up bulk of the bill, increased to P5.3491 per kWh, from P5.2651 per kWh.

The increase is the result of P0.6554- per-kWh rise in the cost of power from power-supply agreements due to lower average plant dispatch and higher fuel prices. The share of PSA purchases to Meralco’s total requirement this month was 43 percent.

Meanwhile, charges from WESM declined by P1.1021 per kWh with the absence of yellow alerts in the Luzon grid this month. Despite higher Malampaya natural gas prices as a result of the quarterly repricing to reflect recent movement of crude-oil prices in the world market, the cost of power from independent power producers (IPPs) decreased by P0.1690 per kWh due to an improvement in average plant dispatch.

Power plants using Malampaya natural gas provided 58 percent of Meralco’s supply.

The shares of WESM and IPPs purchases to Meralco’s total requirement in August were 12 percent and 45 percent, respectively.