Meralco blames higher generation charge
MANILA, Philippines—Customers of Manila Electric Co. should gear for higher electricity bills this month as the generation charge rose 11.84 centavos a kilowatt-hour (kWh) to P4.8623 in February.
The increase means that households consuming about 100 kWh a month have to pay P11.84 more this month, while those consuming 200 kWh will have to bear with a P23.68 increase in their monthly bills. Households consuming 300 kWh can expect a P35.52 jump in their February bills.
Meralco explained in a statement that the higher electricity prices this month had been triggered by the lower dispatch (or electricity output) from its independent power producers, given a decrease in power demand last month. This resulted in higher power costs.
“The utilization level of the IPPs fell below 80 percent for the first time since April 2010 as Meralco’s peak demand went down by more than 200 megawatts to 4,657 MW due to cooler temperatures,” the utility firm explained.
However, Meralco stressed that despite the increase in the cost of power sourced from the IPPs, these facilities remained to be the company’s cheapest source of electricity.
The distribution utility buys from three IPPs—Quezon Power Philippines Ltd.’s coal-fired facility, the 1,000-megawatt Sta. Rita and the 500-MW San Lorenzo natural gas-fired power plants, which are both owned by the Lopez-led First Gas Holdings.
Meanwhile, the increase in the IPP costs were partly offset by a P1.36-per-kWh reduction in the effective Wholesale Electricity Spot Market (WESM) price billed on Meralco in January, which was the basis of the February generation charge.
Similarly, the cost of power sourced from state-run National Power Corp. fell 3.43 centavos a kWh, helping offset the increases in IPP costs.
According to Meralco, it sourced 46.6 percent of its electricity requirements from Napocor last month, 46.4 percent from the IPPs and only 7 percent from the WESM.
The increase in power bills this February followed two months of successive decreases in the generation charge amounting to a combined 55-centavo-a-kWh drop from December 2010 to January 2011.
Despite the latest upward adjustment, Meralco noted that the February generation charge still registered a lower rate compared with those recorded last year, except in January and October.
Meralco reiterated that the generation charge was entirely a pass-through charge and did not accrue or go to Meralco. The cost of electricity sold by the generating companies could move from month to month based on many factors beyond its control, among them fuel prices, the dispatch of the IPPs, the foreign exchange rate and WESM prices.
The generation charge, which is the electricity bill’s biggest component, averages about 60 percent of the customer’s average monthly power bill. This goes directly to Meralco’s power suppliers.
Meralco explained in a statement that the higher electricity prices this month had been triggered by the lower dispatch (or electricity output) from its independent power producers, given a decrease in power demand last month. This resulted in higher power costs.
“The utilization level of the IPPs fell below 80 percent for the first time since April 2010 as Meralco’s peak demand went down by more than 200 megawatts to 4,657 MW due to cooler temperatures,” the utility firm explained.
However, Meralco stressed that despite the increase in the cost of power sourced from the IPPs, these facilities remained to be the company’s cheapest source of electricity.
The distribution utility buys from three IPPs—Quezon Power Philippines Ltd.’s coal-fired facility, the 1,000-megawatt Sta. Rita and the 500-MW San Lorenzo natural gas-fired power plants, which are both owned by the Lopez-led First Gas Holdings.
Meanwhile, the increase in the IPP costs were partly offset by a P1.36-per-kWh reduction in the effective Wholesale Electricity Spot Market (WESM) price billed on Meralco in January, which was the basis of the February generation charge.
Similarly, the cost of power sourced from state-run National Power Corp. fell 3.43 centavos a kWh, helping offset the increases in IPP costs.
According to Meralco, it sourced 46.6 percent of its electricity requirements from Napocor last month, 46.4 percent from the IPPs and only 7 percent from the WESM.
The increase in power bills this February followed two months of successive decreases in the generation charge amounting to a combined 55-centavo-a-kWh drop from December 2010 to January 2011.
Despite the latest upward adjustment, Meralco noted that the February generation charge still registered a lower rate compared with those recorded last year, except in January and October.
Meralco reiterated that the generation charge was entirely a pass-through charge and did not accrue or go to Meralco. The cost of electricity sold by the generating companies could move from month to month based on many factors beyond its control, among them fuel prices, the dispatch of the IPPs, the foreign exchange rate and WESM prices.
The generation charge, which is the electricity bill’s biggest component, averages about 60 percent of the customer’s average monthly power bill. This goes directly to Meralco’s power suppliers.
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