Meralco hikes power rate

Contrary to expectations of lower rates this month, customers of utility giant Manila Electric Company (Meralco) will have to bear the brunt of P0.44 per kilowatt hour (kWh) hike in generation charge this month, up to P6.0962 per kWh from P5.6546 per kWh in July.

The utility firm mainly blamed higher prices at the Wholesale Electricity Spot Market (WESM) as billed from last month’s trading.

Market operator Philippine Electricity Market Corporation (PEMC) has in turn attributed the higher prices to congestion in the system which falls under the responsibility of system operator National Grid Corporation of the Philippines (NGCP) due to ongoing repair at the San Jose substation. The repair work will be completed October 5 this year, so higher nodal prices may persist as a result of the facility’s shutdown.

It is generally expected that with the onset of the rainy season, the availability of the hydro plants will improve, hence resulting in lower generation charge. Nevertheless, with the higher price separation resulting from congestion in the transmission network, the reverse happened.

Myrna Velasco, Manila Bulletin

“This month’s generation charge is second highest for the year, 67 centavos lower than the peak level of P6.77 per kWh registered in April,” the utility firm said.

It added that the rates billed by WESM for this month was at a high of P10.98 per kWh from the previous month’s P7.90 per kWh.

This is still, however, lower than the peak price of roughly P12 per kWh logged during the peak of summer months and when most plants were on maintenance shutdowns.

“Of the P3.08 per kWh increase, P1.46 per kWh was contributed by higher market clearing prices, P0.85 per kWh due to increase in line rental cost, and the remaining P0.77 per kWh due to various adjustments pertaining to June 2010 WESM supply,” thE company stressed.

It qualified further that “the 44 centavos adjustment in the generation charge translates to an increase of around 4 percent from the average July, 2010 Meralco bill.”

It stressed though that there would be some cushion as to its impact on marginalized end-users, or those with consumption of below 100 kWh because of the lifeline subsidy discounts, hence the final numbers to be reflected in their bills will be at a lower level of P0.22 per kWh. They account for about 1.9 million of Meralco’s customer base.

“For lifeline residential customers or those consuming 100 kWh or less, the increase is much less at an average P0.22 per kWh,” Meralco stressed.

Looking at the mix of Meralco’s power suppliers, it can be gleaned that lower cost billed by the National Power Corporation (Napocor) during the month provided some “tempering effect” on the overall generation charge, with its cost going down by P0.63 per kWh to P4.96 from last month’s P5.59 per kWh.

In the case of its contracted independent power producers, Meralco qualified that there was a P0.077 increase in its billed generation charge, mainly due to higher amount of P1.26 per kWh charged by Quezon Power facility.

The charges of Sta. Rita and San Lorenzo gas plants, the company noted, have been down by P0.13 and P0.29 per kWh, respectively; with Meralco stressing that so far these two facilities became its cheapest source of power for the month.

Onward, the company vowed that it will be “actively seeking to source more power both from Napocor and power generators under direct contracts.”

The law mandates that at least 10 percent of the distribution utility’s supply will have to be sourced from the electricity spot market.