February power rates up on higher generation cost

Expect higher charges as summer nears—Meralco
/ 02:03 AM February 06, 2016

Customers of Manila Electric Co. (Meralco) face higher bills this month due to power producers’ higher operational costs.

In an advisory Friday, Meralco said rates for residential customers will go up by 42 centavos per kilowatt hour (kWh) this month. This means for a typical household consuming 200 kWh, P85 will be added to their electricity bill.


The generation charge, which takes up the bulk of overall rates, increased by 25 centavos per kWh. Meralco said this was partly due to “base effect,” which meant a spike from the unusually low generation charges in January.

“Plants under the Power Supply Agreements (PSAs) registered an increase of 76 centavos per kWh. Cost of purchases from PSAs, which were low last month due to adjustments from an annual reconciliation of outage allowances, normalized this month,” Meralco said.


Also contributing to the increase in PSA charges were the lower plant capacity factors, due in part to the scheduled maintenance shutdown of one unit each of the Calaca and Masinloc power plants, Meralco said.

Lower charges from the Wholesale Electricity Spot Market (WESM) and Independent Power Producers (IPPs) were not enough to offset the increase in PSA charges, Meralco said.

WESM charges dropped by P2.21 per kWh, largely due to lower spot market demand, Meralco said.

The average rate of the IPPs also slightly went down by 1 centavo per kWh. The average price of natural gas for the First Gas plants went down following the quarterly repricing of the Malampaya natural gas that feeds the plants. The lower fuel costs were not maximized, however, since the dispatch level of the IPPs was reduced, Meralco said.

On the other hand, transmission charge increased by 8 centavos per kWh due to higher ancillary charges.

Following the increase in generation and transmission charges, taxes also increased by 5 centavos per kWh. Other charges likewise increased by 4 centavos per kWh.

Meralco’s distribution, supply, and metering charges remained unchanged after it registered a reduction last July.


Meralco said it does not earn from these pass-through charges—the generation and transmission charges, among others. Payment for the generation charge goes to the power suppliers, while payment for the transmission charge goes to the National Grid Corporation of the Philippines (NGCP).

Customers should expect even higher rates in the coming months as summer approaches, Meralco said.

Based on historical data, Meralco said consumption and overall demand for power spike as temperature rises. This is more evident since the country is experiencing the El Niño phenomenon.

For consumers to save on power costs, Meralco reminded the public to observe energy efficiency tips. These include setting the air conditioner’s thermostat from high cool (18 degrees Celsius) to mid cool (25 degrees Celsius). By doing so, customers may save up to P354 per month, it said.

Subscribe to Inquirer Business Newsletter
Read Next
Don't miss out on the latest news and information.
View comments

Subscribe to INQUIRER PLUS to get access to The Philippine Daily Inquirer & other 70+ titles, share up to 5 gadgets, listen to the news, download as early as 4am & share articles on social media. Call 896 6000.

TAGS: Business, Meralco, Power rates
For feedback, complaints, or inquiries, contact us.

© Copyright 1997-2020 INQUIRER.net | All Rights Reserved

We use cookies to ensure you get the best experience on our website. By continuing, you are agreeing to our use of cookies. To find out more, please click this link.