Myrna Velasco
December 1, 2013
An astronomical rise in electric bills which is akin to ‘storm surge’ will be sweeping the customers of Manila Electric Company (Meralco) this Christmas month as its generation charge is expected to hit all-time record high.
Sources from the utility firm hinted “we expect generation charge to significantly surpass previous record highs of P6.77 per kilowatt hour (that was in April 2010) and P6.74 per kWh (August 2012).” That was based on Meralco’s initial data as of Friday (November 29).
November billing month’s increase in generation charge was already at P0.98 per kWh to P5.66 per kWh. So for December, if that rate component will be higher than P6.77 per kWh, the rise could be more than P1.10 per kWh.
And the price spikes will not stop this month, but will also be a salvo in the consumers’ electric bills in the New Year.
“The elevated level is expected to persist in January, then will go down to normal levels in February,” company sources added.
The summer of 2010 was considered the power industry’s “perfect storm” — because the evil twin of price spikes, which is brownouts, also tortured consumers.
For what has been happening this month, industry watchers noted that it will be the sector’s own version of “storm surge” because the rate adjustments will even be higher than 2010.
The maintenance shutdown of the Malampaya gas field starting the second week of November was the main trigger for the rise in electricity rates, because some plants would need to shift to liquid fuels which are more expensive than natural gas.
The generation charge is a pass-through component in the electric bills for distribution utilities like Meralco, meaning, it will just collect such from customers but will also correspondingly remit it to power generators and the Wholesale Electricity Spot Market (WESM) which are the sources of its electricity supply.
Information drive has been intensified both by the government and power industry players as to the impact of the Malampaya shutdown. However, it will still hurt consumers financially once they receive their bills.
Such recurrent hikes in power prices when the gas field is on shutdown just manifests the lack of options for the country’s power system – that it cannot even turn to cheaper alternatives because there is really nothing left on its menu of choices when events like these happen.
The only appeal of Meralco to its customers during these ‘cost burdening’ three months will be to become more efficient and judicious in their use of electricity.
“To mitigate the impending increase, Meralco is advising its customers to manage their electricity consumption,” the company said, noting further that the use of energy efficient lighting and appliances will help to some extent. source
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