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Higher Meralco rates expected this month

MANILA, Philippines — Manila Electric Co. (Meralco) rates are expected to increase this month due to high electricity spot market prices after several power plants tripped last month, along with a weaker peso.

Meralco spokesperson Joe Zaldarriaga said there are indications the generation charge would increase, which would push total electricity rates up for the month of November.

He said the generation charge accounts for more than 50 percent of the rate component.

“This may be attributed to a number of factors, including higher WESM (wholesale electricity spot market) charges due to tight supply conditions last month when a number of plants went on longer unscheduled outages,” Zaldarriaga said.

On Oct. 20, the National Grid Corp. of the Philippines (NGCP) raised the red alert status on the Luzon grid “due to the unexpected shutdown of some power plants.” A red alert status means there is severe power deficiency.

NGCP said available capacity was only at 9,083 megawatts (MW) while peak demand was expected to reach 9,051 MW.

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The severe power situation was due to generation deficiency brought about by the sudden outage of Pagbilao and Quezon Power Philippines Ltd. Co. (QPPL) power plants.

Another factor observed is the depreciation of the peso against the dollar.

“Likewise, peso depreciation also strongly affects generation charge movement. In October, the peso weakened against the US dollar which may also influence generation prices,” Zaldarriaga said.

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