Meralco rates slightly up this month

Published November 5, 2018, 10:00 PM By Myrna M. Velasco
https://business.mb.com.ph/2018/11/05/meralco-rates-slightly-up-this-month/

The overall rate to be passed on by power utility giant Manila Electric Company (Meralco) will be on slight uptrend this month due to rise in cost items being billed.

According to Meralco Vice President Lawrence S. Fernandez, while Malampaya gas prices had been up, this may be offset by the improvement in the value of the local currency versus the US dollar.

He described rate swing this month to be “flattish up,” as he noted that the utility firm’s tariffs are already coming from two successive reductions in the past billing months.

Fernandez further explained that while prices in the Wholesale Electricity Spot Market (WESM) had been higher due to reported transmission congestion problem last month, “this may be balanced by higher capacity availability.”

Particularly for Meralco’s supply procurement, it noted that it was able to optimize utilization of contracted capacities under its power supply agreements with generation companies.

Electricity consumption in recent months, as emphasized, had been generally affected by the rising cost of commodities plus the cooler temperatures and extreme swings in weather conditions that had dampened overall power demand.

The utility firm primarily cited the slower pace of consumption in the segment of residential end-users, which it had fundamentally attributed to “the adverse effects of increasing inflation and weather disturbances.”

Meralco stressed “inflation has been rising since the beginning of the year, with the highest level for the year at 6.7 percent registered in September, the highest since February 2009.”

It added the “real feel temperature had also been lower compared to last year,” referencing it at 0.05 degrees centigrade temperature drop in the first nine months of the year.

On its off-take (capacity purchase) of electricity from contracted generation companies, Meralco noted that it continues to adhere to its mandate of “sourcing power at the least cost.”

In the last three quarters of the year, the utility firm indicated that its average billed rate had been at P8.95 per kilowatt- hour (kWh) – with the generation charge component hovering at P5.06 per kWh.

Customers are generally apprised on the generation charge component in the monthly electric bills, because that accounts for the bulk of the total rate being passed on. It is also the line item that swings on a monthly basis.

For the regulated distribution charge of Meralco as well as the transmission charge of National Grid Corporation of the Philippines, adjustments are only enforced upon the approval of the Energy Regulatory Commission.