Meralco bills up this month until July

By: Amy R. Remo - 11 years ago

INQUIRER.net FILE PHOTO

Customers of Manila Electric Co. (Meralco) should brace for higher electricity bills starting this month up to July this year, as the expected increase in power consumption during the hot summer months puts pressure on power rates.

The generation charge for the April supply month (which will be reflected in the May billing month) is projected to go up to P7.69 per kilowatt-hour, Lawrence S. Fernandez, Meralco assistant vice president and head of utility economics, confirmed on Friday.

This represents an increase of P2.48 per kWh compared with the P5.21 per kWh gencharge recorded during the February supply month (which was reflected in the March billing month).

The generation charge for the May supply month (to be billed in June) is projected to reach P6.57 per kWh, and for June supply month (to be billed in July), P7.23 per kWh, Fernandez said.

Higher power bills

Meralco has yet to announce the final generation charge for the March supply month (to be reflected in this month’s electricity bill). Indications, however, point to an expected increase in power bills as the higher demand for electricity will put pressure on prices at the wholesale electricity spot market (WESM), he explained.

Fernandez, however, said that these projected generation charges could still go down should the Energy Regulatory Commission (ERC) approve Meralco’s application for three interim power supply agreements.

The country’s biggest distribution utility recently signed power supply agreements that could provide up to 204 megawatts in additional capacity, in a bid to reduce and mitigate Meralco’s exposure to the WESM from April 1 to June 30 this year.

According to Meralco, it signed separate interim agreements with Toledo Power Co. for the supply of up to 28 MW, with an option for an additional 9 MW, and with Panay Power Corp., which will provide 27 MW. A similar agreement was executed with 1590 Energy Corp. for the purchase of up to 140 MW in capacity and associated energy output from the 225-MW Bauang Power Plant in La Union.

Exposure to WESM

ERC Executive Director Francis Saturnino Juan said that the exposure of Meralco to WESM may increase to more than 10 percent of its electricity requirements without the additional capacity coming from the new supply agreements.

It can be recalled that Meralco took a hit when it wanted to impose a P4.15 per kWh rate increase in the generation charge, given the high spot market charges of up to P36.08 per kWh for the billing month of December. The amount was later recalculated as the WESM prices during the said period were deemed unreasonable, irrational and uncompetitive.

According to Fernandez, the approval of Meralco’s three interim power supply agreements will help bring down the generation charge to P7.16 per kWh for the April supply month; P6.23 per kWh for the May supply month; and P6.64 per kWh for June. These figures, however, were still higher than the P5.21 per kWh gencharge billed in March.

New application

In a related development, Meralco announced that it has filed in the ERC an application for new distribution, supply and metering charges.

As provided under the Performance Based Regulation scheme, this application was for the adjustment of Meralco’s maximum average price for regulatory year 2015, and its rate translation into distribution, supply and metering charges to different customer classes.