Meralco increases rate by P0.42/kWh

posted February 05, 2016 at 11:55 pm by  Alena Mae S. Flores

http://thestandard.com.ph/business/198603/meralco-increases-rate-by-p0-42-kwh.html

Consumers of Manila Electric Co. will pay a higher power rate of P0.42 per kilowatt-hour this month, prompting the Energy Regulatory Commission to ask the utility to explain its computation.

Meralco warned in a statement “customers may expect a couple more of rate increases in the coming months as summer approaches.”

It said consumption, and consequently overall demand for power based on historical data, spikes as temperature rises. The utility said higher consumption would become more evident amid the El Niño weather phenomenon.

Meralco said the P0.42 per kWh increase translated into an additional amount of around P85 to the overall electricity monthly bill of a typical household consuming 200 kilowatt-hours. 

The increase came about after electricity price reductions in the past several months. Meralco posted a cumulative reduction of P2.28 per kWh over the past nine months.

Meralco, however, said despite the recent increase, this month’s overall rate of P8.82 per kWh was still lower by P1.69 per kWh compared with the overall rate of P10.51 per kWh year-on-year.

“We will issue an order requiring Meralco to submit its calculations,” ERC chairman Jose Vicente Salazar said.

Salazar said Meralco’s latest rate adjustment was covered by existing mechanisms on pass-through charges.

He said under ERC’s rules, Meralco was required to submit to ERC a calculation of automatic pass-through charges by the end of the succeeding month, which meant data of the rate increase would only be forwarded on February 28.

“However, the ERC may require the submission of said calculation earlier than the prescribed timeline,” Salazar said.

Meralco said the increase in the overall rates was primarily due to the generation charge, which increased P0.25 per kWh from January.  

Meralco said at P4.17 per kWh, the February generation charge was still P1.07 per kWh lower compared with February 2015’s P5.24 per kWh.

Meralco said this month’s generation charge was also P0.32 per kWh lower than 2015’s overall average generation charge of P4.49 per kWh.

The company said supply sources from plants under the power supply agreements or PSAs registered an increase of P0.76 per kWh.

“Cost of purchases from PSAs, which were low last month due to adjustments from an annual reconciliation of outage allowances, normalized this month. Also contributing to the increase in PSA charges are their lower plant capacity factors, partly due to the scheduled maintenance shutdown of one unit each of the Calaca and Masinloc power plants,” Meralco said.

The power distributor said the increase in the PSA charges more than offset the reduction in charges from the Wholesale Electricity Spot Market, the country’s trading floor of electricity, and independent power producers or IPPS.

Charges from the WESM, the country’s trading floor of electricity registered a reduction of P2.21 per kWh, largely due to lower system demand.

The average rate of the IPPs also slightly decreased P0.01 per kWh. The average price of natural gas from First Gas plants dropped from $7.71 per gigajoules to $6.79 per GJ following the quarterly repricing of the Malampaya natural gas.