Meralco rates flattish for December billing

Published December 4, 2020, 12:25 PM

by Myrna M. Velasco

Customers of Manila Electric Company (Meralco) will not need to be anxious on their December electricity bills, as initial forecast point to “flattish rate” or there could be very slight cost movement in the overall tariff.

“Initial data suggests that generation costs for December will be flattish,” Meralco Vice President and Head of Corporate Communications Joe Zaldarriaga said.


The utility firm will announce rate adjustments next week for this month’s billing cycle. The company said it is still awaiting final billings from all of its power suppliers.

Several events will be affecting the pass-on rate of the utility firm this month – including the strong typhoons that barreled the country in the last supply month; as well as the maintenance shutdown undertaken at the Malampaya field that resulted in fuel restriction to gas-fired power plants.

As indicated by Zaldarriaga, “typhoons Quinta, Rolly and Ulysses led to transmission lines and several large plants going on forced outages,” and such incidents in the power system instigated price spikes in the Wholesale Electricity Spot Market.

Based on data, spot market prices surged to P20 to P22 per kilowatt hour (kWh) on October 27 and 28, because of the reported forced outages in power generating facilities. The pass-on rate for December billing covers the supply month within October 26-November 25 stretch.

The Meralco executive qualified though that “due to the effects of typhoon Ulysses, the WESM was suspended by the ERC (Energy Regulatory Commission) from November 12-13, thus, WESM prices may not be affected by the increase in plant outages due to the typhoons.”

An administered price will be enforced by the WESM operator in cases of market intervention or suspension that may be triggered by extraordinary events, primarily natural calamities.

Zaldarriaga stressed “the effect of more plant outages seems to be offset by a decrease in demand, so generation costs appear to be stable.”

All things considered, the utility firm further noted that demand in the Luzon grid decelerated last month and that was mainly “due to occurrence of the weather disturbances.”

It was worth noting that from a peak demand of 10,344 megawatts in October supply month, this was down to 9,886MW in November, according to the company.

Sifting through the whole year, Meralco emphasized that its overall tariff still registered a net decrease of P1.35 per kWh; and the company is by far expecting power rates this year “to be significantly lower than that of the previous year, despite whatever rate movement will there be for December.”