Meralco bill to go down by 13.14 centavos/kwh in February

By Amy R. Remo 
Philippine Daily Inquirer 
7:28 pm | Monday, February 3rd, 2014

INQUIRER.net FILE PHOTO

MANILA, Philippines — Customers of Manila Electric Co. can look forward to a reduction of 13.14 centavos per kilowatt-hour in the generation charge for February to P5.54 per kWh, from the P5.67 per kWh collected in January.

This means that households consuming 101 kWh in a month could expect a P13.27 decline in their power bills for February, while those with a 200-kWh consumption will see a P26.28 decrease, according to Lawrence S. Fernandez, assistant vice president and head of utility economics for Meralco.

Households consuming 300 kWh and 400 kWh monthly would enjoy reductions of P39.42 and P52.56, respectively, Fernandez said by phone on Monday.

According to Meralco, the February generation charge, if to be compared with the actual generation charge of P10.23 per kWh for January, would have represented a P4.69-per-kWh reduction.

It can be recalled that the generation charge for the billing month of January was temporarily capped at P5.67 per kWh, instead of the actual P10.23 per kWh, due to the temporary restraining order (TRO) issued by the Supreme Court. The resolution of the case remained pending.

In a separate statement issued on Monday, Meralco explained that the reduction this month was due to the normalization of power supply in Luzon, following the maintenance shutdown of the Malampaya facilities, as well as the scheduled and extended shutdowns and forced outages of major baseload power plants in November and December last year.

The normalization of power supply was reflected on the cost of power that Meralco purchased from the wholesale electricity spot market (WESM) and independent power producers (IPPs) and through its power supply agreements (PSAs). On a consumer’s power bill, the reduction can be seen on the generation charge component.

“This reduction in the generation charge, particularly in the cost of power from WESM, was expected as power supply normalized during the January supply month, with most of the baseload power plants that were previously out of service returning to normal operations and with gas-fired plants no longer using the more costly liquid fuel, such as condensate and bio-diesel,” Meralco explained.

“Said shutdown of Malampaya gas facility and the scheduled, unscheduled or forced, and extended shutdown of major power plants during the November and December 2013 supply months caused an aberration in the generation charge levels for the December 2013 and January 2014 bills of customers, which reached record highs of P9.107 and P10.23 per kWh, respectively. Absent such aberration in the market, prices returned to their normal level,” it further said.

According to Meralco, WESM charges dropped significantly to only P5.41 per kWh during the January supply month from a high of P36.08 per kWh in December.

Average cost of power taken from facilities selling to Meralco under the PSAs fell by 28 centavos per kWh to P4.81 per kWh from P5.09 per kWh.

The cost of power purchased from IPPs similarly recorded a 48-centavo per kWh reduction to P5.99 per kWh from the previous month’s level of P6.47 per kWh.

For the supply month of January, Meralco got 52 percent of its electricity requirements from its PSAs, 46 percent from the IPPs, 2 percent from WESM.

Meralco has repeatedly said that it does not earn from the generation charge, which comprises majority of the electricity bill.
Payment for this bill component goes to the power suppliers such as the IPPs, plants selling to Meralco under the PSAs and the WESM. Meralco’s distribution, supply, and metering charges account for only about 18 percent on the average of the total electricity bill.   source