Meralco raises power rates for April

Danessa Rivera (The Philippine Star) - April 9, 2019 - 12:00am

https://www.philstar.com/business/2019/04/09/1908380/meralco-raises-power-rates-april



MANILA, Philippines — A weaker peso and higher spot market prices due to tight supply conditions pushed Manila Electric Co. (Meralco) rates higher this month.

Meralco said its overall electricity rates increased by 6.33 centavos per kilowatt-hour from P10.4961 per kwh last March to P10.5594 per kwh this month.

The upward adjustment translates to an additional P12.66 rise in the total bill of a typical household consuming 200 kwh.

Meralco attributed the overall rate increase to higher generation charge, the electricity bill’s biggest component.

Generation charge went up to P5.6322 per kwh.

“The generation charge increase is primarily due to higher charges from the Wholesale Electricity Spot Market (WESM) and the weakening of the peso against the US dollar,” Meralco said.

WESM charges, which increased by P1.2815 per kwh, was brought about by tighter supply conditions in the Luzon grid.

The National Grid Corp. of the Philippines (NGCP) placed the grid under yellow alert on March 5, 7 and 8, due to insufficient operating reserves brought about by limited capability of several power plants because of outages.

WESM’s share to Meralco’s total requirement this month declined to 10.4 percent.

Meanwhile, the cost of power from the independent power producers (IPPs) also increased by P0.0881 per kwh due to the weakening of the peso against US dollar. About 95 percent of IPP charges are dollar-denominated.

On the other hand, charges
from the power supply agreements (PSAs) – another component of the generation charge – decreased by P0.2796 per kwh.

IPPs and PSAs provided 41.4 percent and 48.2 percent of Meralco’s supply needs, respectively.

In terms of other bill
charges, the feed-in tariff allowance (FIT-All) fell by P0.0337 per kwh following the approval of the Energy Regulatory Commission.

Meanwhile, universal charge-stranded debts were adjusted by P0.0163 per kwh, resulting in a net reduction of P0.0174 per kwh.

However, transmission charge, taxes, and other
charges to residential custo-mers increased by P0.0458 per kwh.

Meanwhile, Meralco’s distribution, supply, and metering charges remained unchanged for 45 months, after these registered reductions in July 2015.

Meanwhile, the Energy Regulatory Commission has cleared the P1.8-billion transmission project of the National Grid Corp. of the Philippines in Cebu.

The Cebu–Lapu-Lapu Transmission Project will form part of the planned 230-kilovolt (kv) transmission backbone in the Visayas and will serve as an outage contingency to the existing Cebu–Mandaue–Lapu-Lapu transmission corridor.

Scheduled to be implemented this year until 2020, the project aims to address
the expected overloading of the Cebu-Mandaue, Lapu-Lapu-Lapu Transmision line which will result in power curtailment,” ERC chairperson and CEO Agnes Devanadera said.

The CLTP is subject to optimization based on its actual use and/or implementation during the reset process for the next regulatory period.

Optimization focuses on removing redundant assets and over-capacity, as well as inefficient design and “gold-plated” engineering within the existing network.

NGCP is also required to conduct competitive bidding in the implementation of the projects.

“The (CLTP) will redound to the benefit of the electricity consumers in terms of having a sustainable electricity in Cebu. Also, the project will increase NGCP’s grid transfer capability as power interchanges between Visayas and Mindanao will become possible once the ERC-approved Visayas-Mindanao interconnection project (VMIP) is implemented,” Devanadera said.