Meralco hikes power rate

LPGMA rolls back cooking gas price by P1 per kilo

Manila Bulletin

By MYRNA M. VELASCO and ELLSON A. QUISMORIO

February 7, 2011, 6:59pm

MANILA, Philippines – The generation charge of Manila Electric Company (Meralco) will go up by P0.1184 per kilowatt hour (kWh), to P4.8623 per kWh from last month’s P4.7439 per kWh starting this February billing, while the price of cooking gas has been slashed by P1 per kilogram.

Meralco announced the increase in generation charge for the month due to higher procurement cost from its contracted independent power producers (IPPs). The selling price of National Power Corporation (NPC) was on a downtrend, but only slightly by P0.0343 per kWh.

The company said the increase in IPP prices “were partly offset by a P1.36 per kWh reduction in the effective Wholesale Electricity Spot Market (WESM) prices” as billed in January – the basis of the cost passon for this billing cycle.

Meralco said the cost of supply it purchased from the First Gas plant had gone up “because natural gas prices already normalized after using lower-priced banked gas in December.”

The utility firm added that its IPP plants also had “lower dispatch because of lower system demand” due to lower temperatures. With the divisor getting smaller for the dispatched capacity, the resulting price would typically be higher.

In two successive months, the distribution company indicated that the total reduction it passed on to customers on its generation charge had been P0.55 per kWh.

“Despite the adjustment, the February generation charge registered a lower rate compared to the generation charges for the whole of last year, with the exception of January and October,” Meralco said.

In its January, 2011 billing, there was a marked reduction in the generation charge passed on by the utility firm to its customers, also due to lower prices from the WESM and the utilization of banked gas by its contracted capacity from the gas plants.

There have also been a decline in transmission charges, that even after implementation increase on its distribution charges, Meralco’s final billing then resulted in a net reduction.

The generation charge component in the electricity bills is revenue-neutral for Meralco because it merely pass-on the cost of power purchases from its suppliers.

For the utilization of its IPP plants, the utility firm explained that it “has fallen below 80% for the first time since April, 2010 as Meralco’s peak demand went down by more than 200mW to 4,657mW due to cooler temperatures.”

It added that “IPP fuel prices also normalized in January”, reiterating that December had been better off because of the utilization of the banked gas.

Cooking gas price cut by P1 per kilo

Meanwhile, the Liquefied Petroleum Gas Marketers Association (LPGMA) announced Monday a P1-per kilo rollback on cooking gas prices.

The LPGMA said that the price reduction would be implemented at 12:01 a.m. Tuesday. The group, composed of independent retailers of cooking gas, cited the drop in world contract prices as reason for the rollback.

A regular cylinder of LPG weighs 11 kilos, meaning that the adjustment Tuesday makes cooking gas from LPGMA members cheaper by P11 per tank. Group members include Island Gas, Regasco Gas, Pinnacle Gas, Cat Gas, M-Gas, Omni Gas and Nation Gas.

As of Monday, cooking gas cylinders from such brands sell between P660 and P680 apiece.

LPGMA Party List Rep. Arnel Ty said last week that consumers can expect a total price cut of “ P3 to P4” for February.

Ty, who served as LPGMA president before the group won as party-list during the elections last year, has been talking about a significant rollback on their product prices as early as the third week of December.

That same month, independent retailers jacked up cooking gas prices by a whopping P6 a kilo or P66 per cylinder.

Ty said the price hike was due to skyrocketing world contract prices for the sensitive commodity, which itself was buoyed by high demand worldwide. But world prices are apparently on their way down.

Tuesday’s rollback was the first by the LPGMA since August 9, 2010. However, it was not the first price reduction on cooking gas this year.

Last January 4, big oil players Pilipinas Shell and Petron Corp. slashed P0.40 a kilo from their respective LPG products, Shellane and Gasul. The movement translated to a P4.40 reduction per cylinder, which currently retail between P700 and P720 in Metro Manila.

For prices of other petroleum products, the Manila Bulletin has yet to get advisories from local oil companies as of press time.