Meralco generation charge drops

Business Mirror
TUESDAY, 06 DECEMBER 2011 21:41 PAUL ANTHONY A. ISLA / REPORTER


THE customers of Manila Electric Co. (Meralco) will enjoy lower power bills this month as its generation charge is set to drop by 27 centavos per kilowatt-hour (kWh) to P5.51/kWh from P5.79 per kWh in November.


Meralco attributes the drop to the reduced price of power bought from the Wholesale Electricity Spot Market (WESM), which fell by P3.49 per kWh to P9 per kWh in November from P12.48 per kWh in October.


In October WESM prices surged due to generation supply constraints brought about by the maintenance shutdown of the Malampaya natural gas pipeline from October 20 to 26.


Meralco said power plants dependent on Malampaya for fuel were able to produce more power when the pipeline resumed operations in November, helping ease the supply constraint and bring down WESM prices.


Meralco said it got 8.9 percent of its energy requirements from the WESM; 48 percent from its independent power producers (IPPs); and 43.1 percent from the National Power Corp. (Napocor).


Meralco said the reduction in WESM prices slightly offset higher prices from the IPPs, whose prices went up by an average of 38 centavos per kWh.


The First Gas plants (Sta. Rita and San Lorenzo), which started using banked gas in October, already had to run on the regularly priced Malampaya gas for the remainder of November. The IPP prices were also affected by the peso’s depreciation against the dollar.


Meralco said the cost of power sold by the generating companies can move from month to month based on many factors beyond its control, including fuel prices, the foreign exchange rate and WESM prices.


The generation charge, which is the electricity bill’s biggest component, averages almost 60 percent of the customer’s average monthly power bill, which goes directly to its power suppliers.