Power rates up this month

MANILA, Philippines - Brace for a hefty increase in power rates this month.

Electricity rates will go up by 84 centavos per kilowatt-hour, or P168 for a typical household consuming 200 kwh.

For households using 300 kwh, the increase is P251, P335 for 400 kwh and P419 for 500 kwh.

The Manila Electric Co. said this is due to the increase in generation charge or the cost of power purchased by Meralco from power plants, and the new line item of four cents per kwh representing feed-in-tariff allowance for renewable energy players (FIT-ALL).

“This was mainly brought about by an upward adjustment in the generation charge. In addition, the transmission charge, taxes and other charges also increased. A new line item, called FIT-All (Renewable), was likewise added to the bill beginning this month. The distribution charge, however, did not register any movement,” Meralco said in its advisory.

The overall February rates are now at P10.51 per kwh, but Meralco stressed this is still lower compared to the rate in February 2014 at P11.04 per kwh and lower than the P10.72 per kwh average rate last year.

Meralco explained the generation charge rose by P0.52 per kwh mainly due to a P1 per kwh increase in the rates of generation companies under the Power Supply Agreement (PSA), as capacity fees normalized from a low level in the preceding month.

Last year three power plants – Ilijan natural gas, Sual and Pagbilao coal plants – had not fully utilized their respective outage allowances.

Generation costs also went up due to the lower dispatch of most generation companies as a result of lower demand in the January supply month, which covered the Christmas holidays and the five-day holiday in the National Capital Region during the visit of Pope Francis.

Furthermore, scheduled and forced outages of power plants in January contributed to the upward pressure on prices at the Wholesale Electricity Spot Market (WESM), the country’s trading floor for electricity.

“However, the higher trading prices in the WESM were offset by a reduction of billing adjustments from prior months, so that WESM charges registered a net reduction of P1.15 per kwh,” Meralco said.

In addition to the generation charge, the transmission charge of the National Grid Corp. of the Philippines (NGCP) also went up by P0.12 per kwh due to an increase in both the wheeling and ancillary charge components of NGCP’s billing.

Taxes went up by around P0.08 per kwh, while other charges (system loss charge and lifeline subsidy) increased by P0.08 per kwh.

“The February 2015 billing will also reflect the new FIT-All (Renewable) charge of P0.04 per kwh, a uniform charge that will be billed to all on-grid electricity consumers nationwide in support of the Feed-in-Tariff Program. The FIT program is a mandate under Section 7 of the Renewable Energy Act of 2008,” Meralco said.

But the FIT-ALL is the subject of a case filed at the Supreme Court questioning its constitutionality.

This developed as Meralco also said that it has filed an application with the Energy Regulatory Commission (ERC), seeking approval for its 2016 capital expenditures program which would fund at least 27 new projects and at least 36 existing or residual projects.

Among the planned projects are new substations, distribution lines and switch gears.

Oil price hike, too

Oil companies also announced a P2 increase in the per liter prices of gasoline, diesel and kerosene. But organized labor yesterday expressed strong opposition to the oil price hike.

Kilusang Mayo Uno (KMU) also pushed for an investigation into the ?gpersistent overpricing?h schemes of big oil companies, especially in relation to the 60 percent drop in global oil prices since last year.

KMU said that oil companies always cite increases in world oil prices to justify immediate increases in local oil prices, but they refuse to heed decreases in global oil prices. – With Mayen Jaymalin