Friday, November 8, 2019

Meralco: Higher spot market price prompts power-rate jump in November


By Lenie Lectura - November 8, 2019

Higher prices at the spot market led to this month’s P0.4717 per kilowatt- hour power-rate hike, bringing November power rates to P9.5579 per kWh.
The Manila Electric Co. (Meralco) said Thursday that the overall rate for a typical household consuming 200 kWh increased from last month’s P9.0862 per kWh. The adjustment of P0.4717 per kWh will mean an increase of around P94 in total electric bill for those with an average monthly consumption of 200 kWh, P141 for 300kWh, P188 for 400 kWh and P235 for 500 kWh.
Despite the adjustment, electricity rates this month are still almost P1 per kWh lower than last April. 
The utility firm said generation charge, which makes up bulk of an electric bill, increased to P5.0317 per kWh from P4.5406 per kWh last month. 
Charges from the Wholesale Electricity Spot Market (WESM) increased by P3.8016 per kWh driven by tighter supply conditions in the Luzon grid. The National Grid Corp. of the Philippines (NGCP) placed the grid on yellow alert last October 14 and 15 due to forced outages of several power plants and the maintenance shutdown of the Malampaya natural gas facility from October 12 to 15. 
The share of WESM to Meralco’s supply needs was at 16 percent.
In addition, WESM charges rose as the net settlement surplus (NSS) refund—ordered by the Energy Regulatory Commission (ERC) last August 1 was significantly lower for November at around P21 million only. 
The ERC-ordered NSS refund last September and October totaled approximately P1 billion, which greatly contributed to the lower generation charges for the two prior months. The NSS refund is expected to end this month. 
Meanwhile, the cost of power from the  independent  power  producers  and power-supply agreements decreased by P0.0476 per kWh and P0.2643 per kWh, respectively, due to higher average plant dispatch, lower coal prices, and the strengthening of the peso against the US dollar. Around 97 percent of IPPs costs and 60 percent of PSA costs are dollar-denominated. 
IPPs and PSAs provided 39 percent and 45 percent of Meralco’s supply needs, respectively.
Transmission charges for residential customers decreased by P0.0767 per kWh brought about by lower ancillary service charges. 
Meanwhile, taxes and other charges registered an increase of P0.0573 per kWh. 
Meralco’s distribution, supply and metering charges, meanwhile, have remained unchanged for 52 months, after these registered reductions in July 2015.
Meralco does not earn from the pass-through charges, such as the generation and transmission charges. Payment for the generation charge goes to the power suppliers, while payment for the transmission charge goes to the NGCP. Taxes and other public policy charges like the FiT-All are remitted to the government.

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