MANILA, Philippines — Customers of Manila Electric Co. (Meralco) may see higher electricity bills in April as supply constraints pushed wholesale electricity spot market (WESM) prices up.
Meralco’s initial projections showed the possibility of higher generation charge next month due to increase in WESM prices, Meralco vice president and head of corporate communications Joe Zaldarriaga said in a statement.
“Luzon peak demand increased by more than 900 megawatts in March due to warmer temperature and large capacities on outage persisted, remaining in excess of 3,400 MW on the average,” Zaldarriaga said.
Based on current prices, daily Luzon load-weighted average price (LWAP) reached P8 per kilowatt-hour during the week of March 1 and P9 per kwh during the week of March 15. Last February, the daily LWAP was below P3 per kwh, Zaldarriaga said.
Meralco’s assessment mirrors the observation of the Independent Electricity Market Operator of the Philippines (IEMOP), the country’s spot market operator.
Earlier, IEMOP said it observed higher WESM prices, reaching an average of P4.23 per kwh as of March 17 as the warmer weather and looser restrictions pushed up demand while outage of power plants reduced supply. This is higher compared with the previous billing month’s P2.22 per kwh.
The market operator said this was largely attributed to the gradual surge in demand as the economy continues to recover from quarantine restrictions and as changes in the weather ensue due to the approaching dry season, as well as generator outages.
As a result of hotter temperature and outage of plants, IEMOP revised its summer outlook, projecting higher average spot market prices between P2.22 per kwh and P5.10 per kwh in April, P2.69 per kwh and P6.94 per kwh in May and P2.65 per kwh and P7.42 per kwh in June.
With the anticipated hike in electricity rates, Meralco urged consumers to conserve energy as consumption normally increases during the summer season.
“We encourage our customers to practice energy efficiency initiatives at home as the summer season may bring an increase in residential electricity consumption by up to 40 percent versus average consumption during the cool months of January and February,” Zaldarriaga said.
The April projection comes after Meralco slashed power rates for the second straight month in March.