Bigger WESM charge pushes up Meralco bills

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THE MANILA ELECTRIC CO. (Meralco) said on Thursday that electricity rates in November will increase by P0.4717 per kilowatt-hour (/kWh) as the power generation charge rose during the month.

For the average household consuming 200 kWh, the increase will bring power cost to P9.5579/kWh from P9.0862/kWh in the previous month. This translates to a P94 increase in the monthly electricity bill for November.

Consumers using 300 kWh, 400 kWh and 500 kWh can expect their monthly bills to increase by P141.51, P188.68 and P235.85, respectively.

Meralco said the higher charges at the wholesale electricity spot market (WESM) led to the overall increase in the generation charge.

“Despite the adjustment, electricity rates this month are still almost P1/kWh lower than in April 2019,” it said.

From P4.5406/kWh in October, the generation charge for November increased to P5.0317/kWh, an upward adjustment of P0.4911/kWh.

Charges from the WESM rose by P3.8016/kWh because of the tighter supply conditions in the Luzon grid. This was after the National Grid Corporation of the Philippines (NGCP) placed the grid on yellow alert on Oct. 14 and 15 due to forced outages of several power plants and the maintenance shutdown of the Malampaya natural gas facility from Oct. 12-15.

WESM charges also rose as the net settlement surplus (NSS) refund, which was ordered by the Energy Regulatory Commission (ERC) on Aug. 1, 2019, was significantly lower for November at around P21 million. “ERC-ordered NSS refund last September and October totaled approximately P1 billion, which greatly contributed to the lower generation charges for the two prior months. The NSS refund is expected to end this month,” Meralco said.

During the period, the share of WESM to Meralco’s supply requirements was at 16%.

Meralco said the cost of power from the independent power producers (IPPs) and power supply agreements (PSAs) went down by P0.0476/kWh and P0.2643/kWh, respectively.

The decrease was due to higher average plant dispatch, lower coal prices, and the strengthening of the peso against the US dollar, it said.

“Around 97% of IPPs costs and 60% of PSA costs are dollar-denominated. IPPs and PSAs provided 39% and 45% of Meralco’s supply needs, respectively,” it added.

Meanwhile, transmission charge for residential customers decreased by P0.0767/kWh as a result of lower NGCP ancillary service charges. Taxes and other charges posted an increase of P0.0573/kWh.

“Meralco’s distribution, supply and metering charges, meanwhile, have remained unchanged for 52 months, after these registered reductions in July 2015,” the utility said in its press release, reiterating that it does not earn from the pass-through charges, such as the generation and transmission charges. — VVS