Meralco cites generation charge ‘downward pressure’

Business World Online
Posted on September 03, 2015 10:54:00 PM

MANILA ELECTRIC Co. (Meralco), the country’s largest power distributor, expects minimal movement in this month’s generation charge, which accounts for the biggest chunk of customers’ electricity bills.

“Indications show that the generation charge will remain stable this September,” Meralco Vice-President Larry S. Fernandez said in a text message yesterday, citing improved dispatch levels and costs at power plants fueled by the Malampaya gas field which supplies about a third of Meralco’s power requirements.

This, the official said, could “provide downward pressure on generation costs.”

However, the impact of a depreciating peso -- whose P46.73-to-the-dollar finish yesterday was 4.5% weaker than its P44.72 closing rate at the end of last year -- could offset such downward pressure.

This expectation was confirmed separately by Meralco Spokesman Joe R. Zaldarriaga.

“The outlook for the September generation charge is stable,” Mr. Zaldarriaga told reporters on the sidelines of a media tour of Meralco’s system control center in Pasig City.

Mr. Zaldarriaga admitted that the generation cost could “possibly go down,” citing likewise the higher dispatch of electricity by generation facilities.

“Because of this, we sourced less power from the WESM (Wholesale Electricity Spot Market).”

Generation charge adjustment depends on actual bills from Meralco’s suppliers. “We have to wait for the actual invoices before we will be able to announce the figure,” Mr. Zaldarriaga said.

FALLING
The generation charge accounts for around 54% of total charges on Meralco’s electricity bill. The rest consist of the distribution charge (18%), transmission charge (11%), system loss charge (5%), as well as taxes and other charges (12%).

Should overall rates fall again this month, it will be the fifth consecutive time that Meralco customers will enjoy bill reductions.

Last month, Meralco cut electricity rates by P0.26 per kilowatt-hour (/kWh) -- bringing the total reduction to P1.46/kWh since May.

“Hopefully, the trend will continue,” said Mr. Zaldarriaga, adding that September’s bill will be announced next week.

Meralco distributes electricity in Metro Manila, Bulacan, Cavite and Rizal, as well as parts of Batangas, Laguna, Quezon and Pampanga. -- Claire-Ann Marie C. Feliciano source