Meralco rates to rise this month | Inquirer Business

Meralco rates to rise this month

WESM price hike forced hand of utility
By: - Reporter / @amyremoINQ
/ 01:41 AM July 10, 2012

Customers of Manila Electric Co., or Meralco, the country’s biggest power distributor, can expect their electricity bills to increase this month as the generation charge component rose by 32 centavos per kilowatt-hour to P6.4549 per kWh.

This means that households consuming 100 kWh a month will have to pay an additional P32 in their electricity bills, while those using 200 kWh a month will have to pay P64 more for July. Households consuming 300 kWh and 400 kWh monthly will have to pay additional P96 and P128, respectively.


Meralco explained in a statement Monday that the increase in the generation charge this month was due to the spike in the cost of power sourced from the wholesale electricity spot market (WESM).

According to the distribution utility, WESM prices increased by P4.43 per kWh in the supply month of June to P20.73 per kWh. The previous month’s rate stood at P16.30 per kWh.


“Prices in the WESM went up due to a series of power plant outages (both forced and planned) that led to frequent incidents of yellow and even red alerts,” Meralco said.

This is the second consecutive month that electricity prices at the WESM went up. It previously registered a hefty increase of P8.39 per kWh in its rates during the May supply month to P16.30 per kWh.

WESM is a platform where electricity produced by generating companies is centrally coordinated and traded similar to other commodities in a market of goods. Prices of electricity are thus said to be “market driven.”

According to Meralco, the decline in the costs of power it sourced from state-run National Power Corp. and its independent power producers was not enough to offset the WESM rate hike.

Napocor’s power rates fell by 5.6 centavos per kWh, while the IPPs registered an average decrease of 14 centavos per kWh due to the appreciation of the peso against the US dollar.

“Although WESM only accounted for 6 percent, its rates pushed the overall generation charge up,” it stressed.

Meralco further warned its customers of another increase next month due to the scheduled eight-day maintenance shutdown of the Malampaya pipeline, which in turn could force natural gas plants to use the more expensive liquid fuel.

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TAGS: electricity, Energy, Manila Electric Co. (Meralco), Power Rate Hike
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