Posted on March 18, 2014 11:21:10 PM
By Claire-Ann C. Feliciano, ReporterMARKET PRICES used as the basis for deferred Manila Electric Co. (Meralco) rate hikes have been slashed, setting the stage for reduced -- but possibly still substantial -- adjustments.
Higher prices charged by suppliers, particularly for power sourced from the Wholesale Electricity Spot Market (WESM), have been blamed for a combined P9.48 per kilowatt-hour (kWh) increase still to be charged consumers.
WESM operator Philippine Electricity Market Corp. (PEMC) yesterday announced that it had adopted new prices in compliance with an Energy Regulatory Commission (ERC) order.
The agency, citing a market failure, last week voided prices for the November and December supply months.
From the original settlement price of P25.404/kWh for the November supply month, the regulated rate will now be P6.007/kWh, PEMC said. For December, the WESM price was cut to P6.246/kWh from P28.367/kWh.
"PEMC will issue the WESM bills today (Tuesday) using the regulated prices with the exception of Meralco’s November bill," PEMC President Melinda L. Ocampo said in a statement.
The distribution utility will not yet be billed for November, PEMC explained, as a P4.15/kWh increase supposed to have been implemented in tranches starting last December has been suspended by the Supreme Court.
An even higher P5.33/kWh adjustment for January, meanwhile, remains pending with the regulator.
Initial PEMC computations showed that Meralco’s rate increases should now amount to P2.43/kWh and P3.02/kWh, respectively, for December and January. These add up to a total P5.45/kWh increase.
The final rate changes, PEMC stressed, will come from Meralco.
"The adjustments in the rate increase will depend in the invoice that will be given by PEMC. After receiving that, we will compute the rates," Meralco Spokesperson Joe R. Zaldarriaga yesterday said, adding that figures could be released today.
"With our new computation, we will revise our petition to recover the deferred charges for January to the ERC. However, we cannot compute the changes in the December increase yet because that’s still pending with the Supreme Court," he noted.
Changes to Meralco’s rate hikes, Energy Secretary Carlos Jericho L. Petilla said, remains subject to ERC verification.
The regulator, in voiding WESM prices during the periods covered by the rate increases, said these "could not qualify as reasonable, rational and competitive", citing a "confluence of factors " and also "widespread withholding of capacity and breach of the must offer rule."
A maintenance shutdown at the Malampaya natural gas facility and outages at other plants occured during the covered supply months, the ERC noted. During this time, power generators also did not comply with the requirement to offer all available capacity in the market.
PEMC was ordered to probe the rule breach and Ms. Ocampo said a report would soon be submitted to the ERC.
While Meralco has since cut rates for February and March as supply costs eased, Mr. Petilla warned that the coming summer months could see power bills go up.
"There will be very tight supply. But we will run the Malaya power plant for 42 days, not necessarily everyday. But I want to make sure that if it is needed, it’s there," Mr. Petilla said at the sidelines of a government economic briefing.
"If there is a tight supply, prices usually shoot up. But it should be noted that [sourcing power from] WESM is optional. What will be the effect ... to the electric cooperatives and Meralco will depend on how much they are going to buy from there," Mr. Petilla said.
"It really depends on their strategy. If they are fully contracted during the summer months, then they no longer have to get from WESM."
Meralco’s controlling stakeholder, Beacon Electric Asset Holdings, Inc., is partly owned by Philippine Long Distance Telephone Co. (PLDT). Hastings Holdings, Inc., a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc., has a majority stake inBusinessWorld. source
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