Meralco rates likely lower in December on sluggish demand

posted December 06, 2020 at 07:40 pm by Alena Mae S. Flores
https://manilastandard.net/business/power-technology/341341/meralco-rates-likely-lower-in-december-on-sluggish-demand.html

Power rates in the franchise area of Manila Electric Co. may decrease in December because of lower demand caused by the typhoons last month, an executive said over the weekend.

“Initial data suggests slightly lower generation costs for December due to a decrease in demand,” Meralco vice president Joe Zaldarriaga said. A large swathe of Luzon experienced blackout after a series of typhoons toppled power lines and caused flooding in November.

Zaldarriaga said Typhoons Quinta, Rolly and Ulysses induced transmission lines and several large plants to go on forced outage which led to prices at the Wholesale Electricity Spot Market reaching P20 per kilowatt-hour and P22/kWh on Oct. 27 and 28, respectively.

The WESM serves as the country’s trading floor of electricity. Meralco secures its power from the WESM, independent producers and supply agreements.

The Energy Regulatory Commission suspended the operations of WESM from Nov. 12 to 13 because of Typhoon Ulysses.

Zaldarriaga said with the market suspension, WESM prices were not be affected by the increase in plant outages also due to the typhoons.

He said demand from the Luzon Grid in November decreased because of the weather disturbances. November peak demand dropped to 9,886 megawatts from October’s peak demand of 10,344 MW.

“In sum, the effect of more plant outages seems to be offset by a decrease in demand, so generation costs appear on a downward trajectory,” Zaldarriaga said.

He said the overall power rate decrease since the start of 2020 was still more than P1 per kWh.

“We still expect the power rates this year to be significantly lower than that of the previous year, especially given the projected flattish or even lower rate movement in December,” Zaldarriaga said.

Meralco said rates went down by P0.0395 per kWh in November to P8.5105 per kWh from P8.55 per kWh in October.

The lower overall rate was equivalent to a decrease of around P8 in the monthly bill of residential customers consuming 200 kWh.

Meralco’s generation charge decreased by P0.0215 per kWh to P4.2018 per kWh in November from P4.2233 per kWh in October because of the P1.28 per kWh reduction in charges from WESM.