Higher electricity rates this month

MANILA, Philippines — Customers of Manila Electric Co. (Meralco) will see higher electricity rates this month as plant shutdowns pushed up prices in the spot market, increasing overall generation charge.

Meralco said there would be an upward adjustment of P0.4717 per kilowatt-hour on its overall rates, from P9.0862 per kwh in October to P9.5579 per kwh this month.

For a 200-kwh household, the adjustment translates to an increase of P94.34 in their November bill.

This is the second consecutive month that Meralco raised bills. But despite the higher adjustments, the power distributor said electricity rates this month are still almost P1 per kwh lower than in April.

Meralco attributed this month’s higher power rates to the increase in wholesale electricity spot market (WESM), which pushed up the generation charge.

The company said the generation charge went up from P4.5406 per kwh to P5.0317 per kwh, as WESM prices increased by P3.8016 per kwh due to tighter supply conditions in the Luzon grid.

“The National Grid Corp. of the Philippines (NGCP) placed the grid on yellow alert on Oct. 14 and 15 due to forced outages of several power plants and the maintenance shutdown of the Malampaya natural gas facility from Oct. 12 to 15,” Meralco said.

Meralco added WESM charges picked up as the Net Settlement Surplus (NSS) refund ordered by the Energy Regulatory Commission (ERC) was significantly lower this month at around P21 million.

“The ERC-ordered NSS refund last September and October totaled approximately P1 billion, which contributed to the lower generation charges for the two prior months. The NSS refund is expected to end this month,” the power distributor said.

The share of WESM to Meralco’s supply needs was at 16 percent.

Other components of the generation charge, which are the cost of power from the Independent Power Producers (IPPs) and Power Supply Agreements (PSAs), decreased by P0.0476 per kwh and P0.2643 per kwh, respectively.

Meralco said the decline was due to higher average plant dispatch, lower coal prices and the strengthening of the peso against the US dollar.

Around 97 percent of IPP costs and 60 percent of PSA costs are dollar-denominated. IPPs and PSAs provided 39 percent and 45 percent of Meralco’s supply needs, respectively.

In terms of other bill charges, the transmission charge for residential customers decreased by P0.0767 per kwh as a result of lower NGCP ancillary service charges.

Meanwhile, taxes and other charges registered an increase of P0.0573 per kwh.

Meralco’s distribution, supply and metering charges have remained unchanged for 52 months, after these registered reductions in July 2015.