January power rate hike to be lot less than originally computed—Meralco

By: Riza T. Olchondra - 11 years ago

AFP FILE PHOTO

MANILA, Philippines—The Manila Electric Co. (Meralco) said on Wednesday the power rate hike it would implement for the January billing would likely be much less than originally computed based on a regulatory order voiding spot market rates in late 2013.

Meralco spokesperson Joe Zaldarriaga told reporters the deferred generation charge increase for January would likely be “70 to 80 percent” less and that the validated figure would be released on Thursday (March 20). He said the figure has been based on the initial re-computation using new rates from the Philippine Electricity Market Corp (PEMC), operator of the Wholesale Electricity Spot Market (WESM).

The record power hike in December, which has not been collected due to a halt order from the Supreme Court, has not been recalculated, Zaldarriaga said.

Head of utility economics Lawrence Fernandez said the PEMC has sent a new billing that would reflect on the pass-through power rates for January.

He asaid Meralco has also been checking new rates with suppliers who were exposed to the WESM. They are AES Masinloc Power Partners Co. Inc., the local unit of AES Corp., which runs the 600MW Masinloc coal-fired power plant in Zambales province; and TeaM Energy Corp., which runs the 1,218 MW Sual coal-fired power plant Pangasinan province.

Fernandez also said the PEMC did not give a new spot market rate for December due to the Supreme Court’s temporary restraining order (TRO).

It can be recalled that the generation charges for the billing months of December and January were temporarily capped at P5.67 per kWh instead of the actual P9.107 per kWh and P10.23 per kWh, respectively. The deferred P4.56 per kwh generation charge in January would now likely be 70 to 80 percent less, the officials said.

They noted, however, that the final rate would still have to be approved by the Energy Regulatory Commission (ERC). In an order dated March 3, ERC ordered PEMC to recalculate “unjustified” and “uncompetitive” market rates late last year. The generation charge hike resulted from a temporary tightness in power supply when a number of power plants had unplanned outages around the time that three natural gas plants were affected by the Malampaya natural gas platform’s maintenance shutdown in November.

The supply tightness drove price surges at the WESM, where Meralco and even some generation firms buy power to meet any shortfall in their electricity requirements.

Amid the TRO and public clamor against the high rates, ERC ordered PEMC to recalculate the prices based on a 12-month average preceding the Malampaya shutdown. On Tuesday this week, PEMC released new Luzon-wide prices that would apply for Meralco along with other power distribution companies.

On Wednesday afternoon, Meralco CFO Betty C. Siy-Yap told reporters that the company might reduce the generation charge hike in customers’ December bills to P0.27 from the original P3.44 a kWh. The overall deferred increase, including taxes based on the generation charge, was supposed to be P4.15 per kWh (but was not implemented due to the Supreme Court TRO).

For January, Siy-Yap said the deferred increase could become P0.45 per kWh from P4.56 per kWh.

Siy-Yap did not elaborate on the basis of her computation.

“We are recalculating the January gencharge (generation charge) based on PEMC’s new invoice but not the one for December since it is the subject of a TRO. Also, we didn’t get a new billing from PEMC for December so we don’t have a basis for a recalculation,” Meralco First Vice-President and legal head William S. Pamintuan said in an interview.

Asked to comment on Siy-Yap’s computation, Pamintuan said that might have been an “academic computation” based on PEMC’s statements to the media.

“We don’t want to add to any more unofficial numbers. This will just result in confusion. We will have to ask for ERC approval for the recalculated January charges, anyway,” Pamintuan said. “Actually, it’s best if we wait for the final rates approved by ERC.”

Zaldarriaga affirmed during Wednesday’s (March 19) briefing that Meralco has started refunding some of its customers who inadvertedly paid for the December charges being restrained by the Supreme Court. The distribution utility has about 5.5 million customers and less than 1 percent had paid the deferred amount, Meralco spokesperson Joe R. Zaldarriaga said in an interview.

Meralco said that of its total 5.5 million customers, about 7 percent or 430,000 customers received bills stating the deferred amount. Of those who got that type of bill, about 8 percent or 37,000 had apparently paid the deferred amount.

On March 5, 2014, Meralco officials said the refund would be made through adjustments in customers’ future bills.

On March 12, Meralco officials said the company would make further refunds should the recalculation of WESM prices result in lower generation charges than what has been collected following the Supreme Court TRO.

“If the recalculation results in lower than the P5.67 per kWh that was charged in December 2013 and January 2014, then we will make the necessary refund,” Pamintuan said in a text message. “But if the result is higher than the P5.67 per kWh that we charged, then we will recover the balance.”