Power rates to rise this month?

Business World Online
Posted on July 08, 2014 11:52:15 PM
By Claire-Ann C. Feliciano, Senior Reporter

MANILA ELECTRIC CO. (Meralco) customers may have to pay more this month, a company official said, with the generation charge component of their bills set to be increased.

“Indications show that charges from power plants with which Meralco has contracts will go up due to lower dispatch following several forced and scheduled outages,” said Larry S. Fernandez, Meralco senior assistant vice-president.

There could also be an increase in the cost of power sourced from Wholesale Electricity Market (WESM), he added.

“We are concerned about the outcome of WESM prices. The last few supply days were marked by simultaneous outages of several large power plant units,” Mr. Fernandez said.

He identified the affected facilities as the second unit of the Masinloc coal plant in Zambales and the primary units of the Sual coal plant in Pangasinan and the Calaca coal plant in Batangas.

The WESM accounted for 4% of Meralco’s total energy requirement in last month’s billing, Mr. Fernandez added, while power supply agreements and independent power producer contracts comprised the bulk at 55% and 41%, respectively.

A generation charge increase should be expected, he said, but added that this could be offset by a regulator-mandated distribution rate cut

“We still can’t say if the Meralco distribution [rate] reduction can totally or only partially offset the generation cost increase,” he said.

The Energy Regulatory Commission last month ordered the firm to cut its distribution rates starting August to P1.5562 per kilowatt-hour (kWh) from P1.6474/kWh following an annual review.

Mr. Fernandez added that Meralco would also check how the transmission charge component moved.

The generation charge accounts for some 57% of a Meralco power bill. The rest are the distribution charge (17%), transmission charge (10%), system loss charge (5%), and taxes and other charges (11%).

Adjustments for this month’s bills will likely be announced this Thursday, Mr. Fernandez said.

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 in BusinessWorld. source