Meralco rate to increase by 10 centavos per kWh in October | Inquirer Business
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Meralco rate to increase by 10 centavos per kWh in October

/ 05:43 PM October 08, 2014

MANILA, Philippines—Consumers in the Manila Electric Co. (Meralco) franchise area are in for a P0.10 per kilowatt-hour (kWh) increase in overall rates for October. For a typical household consuming 200 kWh, the adjustment is equivalent to an increase of P20.83 in the electricity bill for this month.

“Following the P0.58 per kilowat-thour (kWh) reduction in electricity rates in September, rates will slightly go up by around P0.10 per kWh in October. Accounting for the rate adjustments over the past two months, that would translate to a net reduction of P0.48 per kWh,” Meralco said.

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The generation charge (which makes up the bulk of overall rates) went up by P0.159 per kWh to P5.35 per kWh from September’s P5.19 per kWh (which was P0.44 per kWh lower than August). The generation charge thus yielded a net reduction of P0.28 per kWh over the past two months, Meralco said.

The country’s largest distribution utility said this month’s increase was primarily due to the five-day Malampaya restriction (September 8-11 and September 21-23). This moved the Sta. Rita and San Lorenzo power plants to use more expensive liquid fuel in lieu of natural gas, driving their generation costs up. This also reduced dispatch of the Ilijan power plant during the September supply month.

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The deterioration of the peso against the dollar from P43.590 to P44.875 this month contributed further to the increase in generation charge, Meralco said.

Meralco said the use of alternative fuel by the natural gas plants accounted for P0.13 per kWh of the increase in the generation charge, while the higher foreign exchange rate added another P0.08 per kWh. If not for these upward adjustments, the generation charge would have gone down by P0.05 per kWh.

Independent Power Producers (IPPs), including Sta. Rita and San Lorenzo, registered a P0.44 per kWh average increase in costs billed through Meralco. Meanwhile, plants under the Power Supply Agreements (PSAs), as a whole, went down by P0.01 per kWh.

The Wholesale Electricity Spot Market (Wesm) likewise registered a reduction of P7.45 per kWh. The presence of the secondary Wesm price cap helped moderate WESM charges and protected customers in spite of the successive restrictions of Malampaya (that limited the output of Ilijan) and the outage of some power plants (both scheduled and forced), Meralco said.

In terms of share to Meralco’s total power requirements for the September supply month, PSAs, IPPs, and Wesm accounted for 53 percent, 46 percent, and 1 percent, respectively.

Contributing also to the overall upward adjustment in the bills to households is the P0.007 per kWh increase in taxes.

Transmission charge, meanwhile, registered a P0.054 decrease per kWh. There was also a cumulative decrease of P0.008 per kWh in subsidies and the system loss charge.

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Meralco says it does not earn from the pass-through charges, such as the generation and transmission charges. Payment for the generation charge goes to the power suppliers such as the plants selling to Meralco through the WESM and under the PSAs, as well as the IPPs. Payment for the transmission charge, meanwhile, goes to the National Grid Corp. of the Philippines. Of the total bill, only the distribution, supply, and metering charges would go to Meralco, the company said.

The distribution utility has also advised the public, in this typhoon season, to report sightings of tree branches that are near or actually touching power lines as these may trigger power outages or cause unnecessary accidents.

Upon notifying Meralco, trained tree trimmers will be sent to remove the tree branches. To request for Meralco’s tree trimming service, customers may contact the Meralco call center at 16211 or post their request over Meralco’s Twitter account (@meralco) and Facebook page (www.facebook.com/meralco).

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TAGS: Business, electricity production and distribution, electricity rate hike, Manila Electric Company, Meralco, Power Rate Hike, Wesm, Wholesale Electricity Spot Market
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