Power rates to go up this month

Danessa Rivera (The Philippine Star) - July 7, 2018 - 12:00am

https://www.philstar.com/headlines/2018/07/07/1831243/power-rates-go-month

MANILA, Philippines — Customers of Manila Electric Co. (Meralco) will see an increase of P0.3136 per kilowatt-hour (kwh) in their July electricity bills, pushed up by the peso’s depreciation against the dollar and higher spot market charges.

This brings Meralco’s overall rate to P10.1925 per kwh from June’s P9.8789 per kwh. The power rate hike comes after two consecutive months of reductions.

For a typical household consuming 200 kwh, this will mean an increase of P62.60 in their total bill, P93.90 for 300 kwh, P125.50 for 400 kwh and P156.20 for 500 kwh.

Meralco attributed the higher July rate mainly to the P0.2823 per kwh increase in generation charge, which went up to P5.2651 per kwh from P4.9828 per kwh from the previous month.

One of the factors in the higher generation charge is the P0.3573 per kwh rise in the cost of power from Independent Power Producers (IPPs) due to continued peso depreciation and lower average plant dispatch.

“Around 96 percent of IPP charges are dollar-denominated,” the power distributor said. The share of IPP purchases in Meralco’s total requirement this month was 38 percent.

The peso’s weakness also pushed up the cost of power from Power Supply Agreements (PSAs) by P0.1513 per kwh. “Around 63 percent of PSA charges are dollar-denominated,” Meralco said, noting PSAs provided 49 percent of its requirements.

Meralco head of utility economics Lawrence Fernandez said the peso weakened from P52.52 to P53.34, “which will increase the peso equivalent of dollar-denominated costs.”

Meanwhile, charges from the Wholesale Electricity Spot Market (WESM) also rose by P0.7039 per kwh due to higher WESM prices.

“As demand for power in the Luzon grid reached a record high of 10,876 MW in the June supply month, the National Grid Corp. of the Philippines (NGCP) declared yellow alerts from May 29 to June 1 and on June 4 due to insufficient reserves,” Meralco said.

“Tight supply conditions likewise persisted in the second half of the month with more generating capacity on outage,” it said.

The share of WESM in Meralco’s total requirement this month amounted to 13 percent.

As other bill components, the transmission charge was unchanged but taxes and other charges went up by P0.0309 per kwh this month as a result of the higher generation charge.

Meralco’s distribution, supply and metering charges, meanwhile, have remained unchanged for 36 months, after these registered reductions in July 2015.