ELECTRICITY CONSUMERS in Metro Manila and surrounding areas will pay more for their power use in July after two consecutive months of reduction, the Manila Electric Co. (Meralco) announced on Friday.
Meralco announced an increase of P0.316 per kilowatt-hour (/kWh) for July to P10.1925/kWh from June’s P9.8789/kWh.
“The higher July rate is mainly due to the P0.2823 pe kWh increase in generation charge,” the company said.
For a typical household consuming 200 kWh, the increase this month means a hike of around P63 in its total monthly bill. For those consuming 300 kWh, 400 kWh and 500 kWh, the corresponding increase is P94.8, P126.4, P158, respectively.
This month, the generation charge increased to P5.2651/kWh from P4.9828/kWh largely because of the peso’s depreciation against the US dollar and the higher charges from the wholesale electricity spot market (WESM).
Meralco said the increase was a result of a P0.3573/kWh rise in the cost of power from independent power producers (IPPs) because of the continued weakness of the local currency and lower average plant dispatch.
“Around 96% of IPP charges are dollar-denominated,” it said. “The share of IPP purchases to Meralco’s total requirement this month was 38%.”
The company said charges from the WESM rose by P0.7039/kWh due to higher prices at the spot market. It said as demand for power in the Luzon grid hit a record high of 10,876 megawatts in the June supply month, system operator National Grid Corporation of the Philippines (NGCP) declared yellow alerts from May 29 to June 1, and on June 4 because of insufficient power reserves.
“Tight supply conditions likewise persisted in the second half of the month with more generating capacity on outage,” it said.
Meralco said the weakening of the peso against the dollar resulted in a P0.1513/kWh increase in the cost of power from power supply agreements (PSAs).
“Around 63% of PSA charges are dollar-denominated. The shares of WESM and PSAs purchases to Meralco’s total requirement this month were 13% and 49%, respectively,” it said.
Other charges also increased such as taxes and other charges, which climbed by P0.0309/kWh as a result of the higher generation charge. The transmission charge to residential customers was stable.
Meralco said its distribution, supply and metering charges has remained unchanged for 36 months, after these posted reductions in July 2015.
The company reiterated that it does not earn from the pass-through charges, such as the generation and transmission charges. “Payment for the generation charge goes to the power suppliers, while payment for the transmission charge goes to the NGCP,” it said, adding that taxes and other public policy charges such as the feed-in tariff allowance are remitted to the government.
Meralco’s controlling stakeholder, Beacon Electric Asset Holdings, Inc., is partly owned by PLDT, Inc. Hastings Holdings, Inc., a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc., has interest in BusinessWorld through the Philippine Star Group, which it controls. — VVS