Meralco’s September rates to go up

Increase due to higher generation charge

By: Riza T. Olchondra, September 9th, 2013 08:53 PM

Manila Electric Co. (Meralco) rates for the month of September will go up by P0.18 a kiloWatt-hour (kWh) due mainly to higher power-generation and transmission charges. This follows a cumulative reduction of P0.65 a kWh during the past two months.

The average residential customer with 200-kWh monthly consumption will experience an increase of P36 in electricity bills for the month of September.

Despite the overall rate increase, Meralco said this month’s generation charge at P5.17 a kWh was still P0.62 lower than the January 2013 level of P5.79 a kWh. The generation charge in January reflected costs in December 2012 prior to the effectivity of the Power Supply Agreements (PSAs), Meralco said.

On a year-on-year basis, this month’s generation charge is lower by 23 centavos a kWh than that in September 2012 and reflected the contribution of the new PSAs, which remained to be the lowest-cost source of electricity.

The country’s top power distributor reported yesterday that the higher rate this month was mainly due to an increase of P0.13 a kWh in the generation charge. Meralco said this resulted from an P8.70-a-kWh upward adjustment in the cost of electricity sourced from the Wholesale Electricity Spot Market (WESM).

WESM prices went up as a result of increases in the trading amount, coupled with higher previous month’s adjustments.

Rates of both the new PSAs and Independent Power Producers (IPPs) went down by P0.03 a kWh. This was due mainly to an improvement in capacity factor for some plants and the reduction in coal prices for the supply month of August, which offset the impact of a slight depreciation of the peso against the dollar.

In terms of contribution to Meralco’s total supply requirements for the August supply month, PSAs, IPPs, WESM and other sources had shares of 56.1, 41.4, 2.4 and 0.1 percent, respectively.

As for other bill components, transmission and other charges increased by P0.08 and P0.01 a kWh, respectively. The increase in transmission charge was mainly due to higher cost of ancillary service charges.

Taxes decreased by P0.04 centavos a kWh.

Meralco said it did not earn from these pass-through charges, the largest of which is the generation charge. Payment for the generation charge goes to power suppliers such as the IPPs, plants selling to Meralco under the PSAs and the WESM. The rest of the pass-through costs include transmission, taxes, universal charges and other fees.

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