With steady increase in demand last month following wider re-opening of the economy, the electricity rates to be billed by Manila Electric Company (Meralco) will be slightly higher this July billing cycle.
As noted by Meralco Spokesperson Joe Zaldarriaga, the demand in Luzon grid was hitting peak in June, rising by about 1,000 megawatts versus the demand plunge that happened at the height of the enhanced community quarantine (ECQ) in various parts of the country.
The ‘yellow alert’ declaration of system operator National Grid Corporation of the Philippines (NGCP) last June 4 due to the forced outages and de-ration of several power plants compounded supply strain; consequently pushing prices higher in the Wholesale Electricity Spot Market.
“The tighter supply conditions led to an upward movement in WESM charges,” Zaldarriaga explained, although he qualified that “the increase may be tempered by savings from force majeure claims” of the utility firm.
The FM claims of the company, however, will likely be leaner compared to previous months as the ECQ and the modified ECQ status of the coronavirus lockdowns had already been eased; and that supply-demand trajectory are now gradually returning to normal course.
According to Robin Descanzo, chief operating officer of spot market operator Independent Electricity Market Operator of the Philippines (IEMOP), the effective spot settlement price (ESSP) for the supply month of June was at P3.25 per kilowatt hour (kwh), which climbed by more than P1.00 per kwh from the May spot price of P2.19 per kwh.
The spot market similarly pointed to unplanned outages of power plants being the main driver for the upticks in prices last month.
The June peak demand also hit a record 12,611 megawatts; while average demand for the entire month hovered at 10,174MW versus available supply of 13,794MW.
Essentially, Descanzo indicated that supply margin was still considerably ample at 3,621MW; although this is already hitting downtrend compared to the time when demand crashed at the height of the lockdown period.
Last month’s spot market exposure of purchasing power utilities had been at 13-percent; while total capacity tied to bilateral contracts accounted for 87-percent.
For the period from January to May, IEMOP stated that total recorded consumption hit 30.477 terra-watt hours (TWh), as customer transactions dropped by 5.2-percent versus the same months last year.
Within the five-month stretch, the average procurements from the WESM stood at 11.6-percent and the effective spot settlement price amounted to P2.53 per kwh.