Electricity rates up 29¢/kwh this month

MANILA, Philippines – Customers of the Manila Electric Co. (Meralco) will pay more for electricity this July mainly due to higher generation charge resulting from instances of tight power supply last month.

Meralco announced yesterday that July rates would go up by 29 cents per kilowatt-hour to P8.61 per kWh, still lower compared to July 2015’s P9.38 per kWh.

A typical household consuming 200 kWh a month will see an additional P58.63 in its bill. An increase of P87.94 is set for households consuming 300 kWh, P117.25 for 400 kWh and P149.57 for 500 kWh.

The July increase comes after successive reductions in power rates in the past three months, Meralco senior vice president and head of utility economics Larry Fernandez said in a text message.

Generation charge went up by P0.34 per kWh to P4.06 per kWh, lower than the P4.74 per kWh generation charge a year earlier. This was primarily due to the higher charges from the Wholesale Electricity Spot Market (WESM).

“Spot market prices went up following tightness in supply. June saw several plants going on outage, resulting in five days of yellow alerts. In contrast, there were no yellow or red alerts in May,” Fernandez said.

In the June supply month, there were five instances of yellow alerts (June 13, 14, 17, 21 and 22) as several power plants went on scheduled and unscheduled outage. Those that underwent scheduled maintenance were Pagbilao-2, San Lorenzo Mod 50 and 60, Sta. Rita Mod 40 and iPower.

Meanwhile, those that went on forced outage include Sual-1, San Gabriel, Calaca 1 and 2, GN Power 1 and 2, Limay A and B, Sta. Rita Mod 10 and 30, SLPGC 1, SLTEC 1 and 2, San Roque 2, Pagbilao 1 and Ambuklao 2.

Due to the tightness in power supply, the diesel-fired Malaya 2 was dispatched for around half of the June supply month. The Malaya plants are “must run units” and are typically instructed by the National Grid Corp. of the Philippines (NGCP) to be dispatched when reserve levels in the grid are very low.

Costs of energy sourced from Independent Power Producers (IPPs) also registered a slight increase of P0.03 per kWh because of the lower dispatch of the Quezon Power Philippines Ltd. (QPPL) plant.

On the other hand, the cost of power from plants under the Power Supply Agreements (PSAs) decreased by P0.02 per kWh following the higher dispatch of the Ilijan natural-gas fired power plant.

As for other bill components, the transmission charge declined by P0.08 per kWh due to lower ancillary charges, while taxes and other charges increased by P0.01 and P0.02 per kWh, respectively, following the increase in generation charge.

Meralco’s distribution, supply and metering charges remain unchanged after registering a reduction last year.

Payment for the generation charge goes to the power suppliers, while payment for the transmission charge goes to the NGCP.