Meralco sees flattish rate in September

Published September 5, 2020, 5:00 AM

by Myrna M. Velasco

Power utility giant Manila Electric Company (Meralco) is expecting flattish rate or there could only be slight upward adjustment in its September billing cycle.

Nevertheless, Meralco Spokesperson Joe Zaldarriaga was quick to add that the preliminarily estimated increase can still be offset by the utility firm’s force majeure (FM) claims, which was so far a major source of cost discount for its customers since the plague of the coronavirus pandemic.

“Initial projections and data suggest that rates for September will be flattish either way, but with a stronger possibility of a slight upward adjustment due to higher average capacity on outage in the Luzon grid,” the company executive said.

He expounded the utility firm is still waiting for the final billings from its various power suppliers – which are its contracted independent power producers, the generation companies which are counterparties in its power supply agreements (PSAs); as well as its purchases from the Wholesale Electricity Spot Market.

Zaldarriaga reiterated “the expected slight increase may be tempered by force majeure claims from PSAs during the return to MECQ (modified enhanced community quarantine) last month and further appreciation of the peso.”

The force majeure claims of Meralco that it invoked with power suppliers reached an aggregate P1.8 billion during the coronavirus-anchored lockdowns in the country; and that redounded to cost reduction in the bills of its customers.

The utility firm is scheduled to announce next week any movement in its electricity tariff for September billing. By far, it has already been implementing five straight months of reduction in its generation charge this year; and four successive months of overall decline in its rate.

The generation charge is the biggest component of its pass-on rate; accounting for more than 50-percent of the costs being billed to its 6.9 million customers.

In the previous months when the utility firm had been logging sequential decline in its electricity rates, Zaldarriaga indicated that the total amount of reduction passed on to their customers already hovered at more than P1.00 per kWh.

Given slump in demand this year because of the niggling impact of the health crisis, it was emphasized that even the routinely high rates in the summer months had been tempered.

Settlement prices in the electricity spot market likewise tapered off as these were only ranging from P1.50 to P3.25 per kWh in recent months compared to record-highs of P8.00 to P9.00 per kWh last year.