Meralco rates up this October billing

Published October 9, 2020, 1:48 PM

by Myrna M. Velasco

Customers of Manila Electric Company (Meralco) will have to shell out additional cash on their electricity budget as the overall rate of the utility firm would be higher by P0.1212 per kilowatt hour (kWh) in their October billing.

With the upward adjustment, the rate of Meralco this month will be at P8.550 per kilowatt hour (kWh) versus the September tariff of P8.4288 per kilowatt hour.

For end-users in the 200-kWh consumption bracket, the overall increase in their electric bills will be around P24, according to the power firm.

The main triggering factor in this month’s hiked electricity bill was the higher generation charge, which climbed by P0.1373 per kWh to P4.2233 per kWh from the month-ago level of P4.0860 per kWh.

“This month’s increase in generation charge is mainly due to higher Wholesale Electricity Spot Market (WESM) charges, brought about by the tightened supply conditions and higher demand,” Meralco explained.

But if reckoned on the six-month successive reduction in Meralco rates that reached an average P0.5772 per kWh, the utility firm emphasized that this month’s rate is still lower compared to last year’s P9.0862 per kWh for the same month of October.

For the other cost components in the electric bills, it was emphasized that transmission charges, as well as taxes and other charges had been lower by P0.0161 per kWh in this billing month.

At the same time, the collection of universal charge for environmental charge (UC-EC) amounting to P0.0025 per kWh remains suspended as previously directed by the Energy Regulatory Commission.

On the higher generation charge this month, Meralco pointed out this was due to confluence of factors in the country’s power system – such as the Malampaya gas restriction in the last supply month and compounded by the forced outages as well as the scheduled shutdown of power plants.

There had also been uptrend in power demand in September, hence, prices in the spot market surged – with some trading intervals reaching the cap of P32 per kWh.

According to Meralco, “had WESM prices remained at their August 2020 levels, the generation charge and the overall rate this month would have decreased by P0.08 and P0.14 per kWh, respectively.”

The exposure of the utility firm in the spot market last month hovered at 19-percent; while the bulk of its procured electricity had been from its power supply agreements (PSAs) with 47-percent share in the pie; and the balance from the contracted independent power producers (IPPs) at 34-percent.

The charges of its PSAs, Meralco noted, inched up by P0.1044 per kWh, since “there were no more force majeure (FM) claims for September supply,” given the manifest rise in power demand. Last month, FM claims amounted to P463 million and that helped soften the pass-on rate of the utility firm then.

For its supply purchases from IPPs, the charges of suppliers had been lower by P0.0174 per kWh in the last supply month “due to higher average plant dispatch.” (MMV)