Business World Online
Posted on December 18, 2013 09:54:16 PM
THE SUSPENSION of Manila Electric Co.’s (Meralco) planned P4.15-per-kilowatt-hour (/kWh) rate increase would only lead to higher costs for consumers, the utility’s top official said yesterday.
Meralco President Oscar S. Reyes said the company will abide if that will be ordered, but he insisted that this would just lead to higher generation charges for its customers. "If we suspend [the rate hike], how are we going to pay the suppliers? It will not be justifiable because if we suspend, the charges will just eventually pile up," Mr. Reyes said.
"The rate increase will not disappear. We still have to pay that," he said.
The generation charge -- or the cost of power sold to Meralco by power producers -- accounts for 56.9% of the total power bill of the customers.
The rest comprises the distribution charge, transmission charge, system loss charge, and taxes and other charges.
Mr. Reyes said the generation charge collected from consumers goes directly to the power suppliers, and not to Meralco. But he noted that Meralco is open to refund the collected charges if the alleged collusion among suppliers will be proven.
Energy Undersecretary Raul B. Aguilos said a tripartite committee composed of the Energy department, Philippine Electricity Market Corp. and the Energy Regulatory Commission (ERC) will come up with a report on the ongoing investigation by yearend.
"That is already being discussed by the tripartite committee that was created to investigate the possible collusion. They can release the results of the investigation by Dec. 30," Mr. Aguilos said when asked if the Energy department is doing something to investigate the allegations on a possible collusion in the industry.
The allegation of collusion among power generators stemmed from the unplanned shutdown of several power-generating facilities that led Meralco to source more power from the WESM. Electricity prices in WESM are dictated by demand and supply. The owner of the power generators that went offline are believed to be participants in the spot market as well.
Mr. Aguilos identified the coal plants that went offline off-schedule as the Calaca 1 in Batangas, the GN Power in Bataan, the Pagbilao 1 and 2 in Pagbilao, Quezon, and Masinloc plant in Zambales.
Earlier this month, Mr. Reyes said Meralco purchased approximately 11.5% of its electricity requirements from the WESM during the supply month of November, which is higher than about 5% the previous month. The higher purchases with WESM coincided with the 30-day planned shutdown of Malampaya gas facility, which fuels three natural gas plants in Batangas where Meralco sources around 50% of its power needs.
"The Malampaya shutdown was planned. Before the shutdown, several coordination meetings were conducted. During the time, Meralco presented figures and simulations factoring the cost that may result from the Malampaya shutdown," Mr. Aguilos said.
But Meralco just last week announced that the increase in power bills amount to a total of P4.15/kWh for December.
The upward adjustment -- which was a record high according to Meralco -- is composed of a P3.44/kWh generation charge, P0.04/kWh transmission charge, P0.33/kWh taxes and P0.34/kWh other charges.
In order to mitigate the impact of the higher costs, Mr. Aguilos said the Energy department suggested the staggering of charges.
Meralco last week secured the ERC’s approval to stagger the collection of the increase in three tranches to mitigate the impact to the customers. The staggered collection involves an increase of P2.41/kWh to be seen in the December billing month. February and March bills will register an increase of P1.21/kWh and P0.53/kWh, respectively. Meralco proposed not to implement the increase in January. -- Claire-Ann Marie C. Feliciano source
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