Meralco rates likely to go down in January

Published December 29, 2017, 10:00 PM By Myrna M. Velasco

https://business.mb.com.ph/2017/12/29/meralco-rates-likely-to-go-down-in-january/

The downtrend in the electricity rates being billed by the Manila Electric Company (Meralco) will likely be sustained in the January billing cycle, according to company spokesman Joe Zaldarriaga.

He noted that their forecast is being based on “historical trends” and looking at the factors that have ‘pull down effect’ on the rate components.

“Hopefully, there will be another reduction in rates for January billing. If we will use historical records as basis, normally rates drop in January,” he told reporters, but he was not able to give concrete numbers yet.

Zaldarriaga cited the slow down in demand this December because of the cold weather, plus the very apparent basement prices of traded capacity at the Wholesale Electricity Spot Market.

The utility firm cyclically announces rate adjustments on the first week of each month, as most of the billings of power suppliers turn in from month-end to every 4th day of a given month.

Zaldarriaga similary indicated that there had been fewer outage incidents in power plants, hence, that will not be exerting pressure on the ‘capacity fees’ that are part of the rate components passed on to the consumers.

Meralco Vice President Lawrence S. Fernandez explained that “as in previous years, we see a significant reduction in capacity fees from plants under PSAs (power supply agreements) due to the reconciliation of outage allowances for the calendar year 2017.”

Given that, he reiterated “it is highly likely that we will see a further reduction in the January 2018 generation charge, following the reduction we experienced this December.”

The company’s power supply deals with the privatized generation companies accounted for roughly 45-46 percent of the utility firm’s supply portfolio.

Zaldarriaga added that “the anticipated reduction in capacity fees arising from the annual reconciliation of outage allowances done at end of each year are normally savings immediately passed on to end consumers by way of lower electricity rates.”