Meralco electricity rates up this month

Bad news for electricity consumers.

The Manila Electric Co. (Meralco), the country’s biggest power distributor, will increase electricity rates this month after its generation charge rose by 44 centavos per kilowatt-hour to P5.79 per kWh.

Thus, households consuming 100 kWh a month will have to pay an additional P44 in electricity bills, while those using 200 kWh a month will have to pay  P88 more for November. Households consuming 300 kWh and 400 kWh monthly will have to pay an additional of P132 and P176, respectively.

In a statement, Meralco explained that the latest increase in electricity prices this month was due to a surge in the prices in the Wholesale Electricity Spot Market (WESM) and the full shutdown of the Malampaya natural gas pipeline from Oct. 20-26 for scheduled maintenance.

“The pipeline’s shutdown affected the operation of large power plants dependent on Malampaya for fuel. The Ilijan power plant, with a capacity of 1,200 megawatts, was completely unavailable as a result. To compensate for the lost capacity, coal and oil-based generation was resorted to by the grid,” Meralco explained.

According to Meralco, the cost of electricity it sourced from the WESM rose to P11.57 per kWh last month, from P8.19 per kWh in the preceding month.

Two of Meralco’s independent power producer (IPPs) facilities, the First Gas-owned 1,000-MW Sta. Rita and 500-MW San Lorenzo plants, continued to operate by shifting to liquid condensate fuel.

The impact was, however, offset as First Gas began to burn banked natural gas. Banked gas referred to the Malampaya fuel that had been paid for by Meralco in prior years when gas was cheaper, but has not yet been utilized.

Meanwhile, there was no change in the cost of electricity sourced by Meralco from the state-run National Power Corp. (Napocor).

For October, Meralco had sourced 47.9 percent of its electricity requirements from its IPPs; 41.5 percent from Napocor; and 10.6 percent from the WESM.

Meralco, however, assured its customers that electricity prices might already normalize next month, with the resumption of the pipeline’s normal operation, which will allow First Gas to fully operate on the cheaper banked natural gas.

“Thus, barring any unforeseen major generation or transmission outage, WESM prices should normalize and customers may expect the generation charge to fall in the following month,” Meralco said.

Meralco again stressed that the generation charge was entirely a pass-through charge and would not accrue or go to Meralco.