Power rates decline in June; no adjustments in Q3 water billing

ELECTRICITY RATES in Metro Manila slightly declined this month, with typical households likely to see a P4 cut in their bills, Manila Electric Co. (Meralco) announced on Monday.

At the same time, there will be no tariff adjustments on water bills in the third quarter, according to the Metropolitan Waterworks and Sewerage System Regulatory Office (MWSS).

In a statement, the Philippines’ biggest power distributor said overall rates for this month fell by P0.0216 per kilowatt-hour (kWh) to P8.7252/kWh from May’s P8.7468/kWh.

Meralco said the rates decline was still due to its relaxed power contracts as electricity demand remained low in areas under strict lockdown and less stringent quarantine.

Households consuming 200k Wh, 300k Wh, 400 kWh, and 500 kWh could expect bill reduction by P4, P6, P9, and P11, respectively.

The listed utility’s generation charge dropped for the third straight month to P4.3413/kWh this month from last month’s P4.3848/kWh after it invoked another force majeure claim in its power supply agreements during the lockdown.

A force majeure event is an uncontrollable event that makes it impossible for power plant operators to fulfill their obligations.

“This June, the force majeure claim totaled P614 million, equivalent to P0.2208/kWh, representing reduction in fixed costs from its baseload supply contracts recently approved by the Energy Regulatory Board (ERC),” Meralco said.

Since April, overall savings from the force majeure claim reached P1.6 billion.

Without it, generation charge and total rate would have increased by P0.18 and P0.24, respectively, from last month’s rate.

Charges from supply contracts, which make up 50.4% of Meralco’s total supply, slipped by P0.0613/kWh, while the cost of power from independent power producers, which supplies the utility with 47.1% of its requirements, also reduced by P0.2334/kWh due to higher average plant dispatch.

Meanwhile, dues from Wholesale Electricity Spot Market (WESM), which fulfills 2.5% of the distributor’s supply needs, went up by P0.3132/kWh because of tighter supply conditions in the Luzon grid upon the incidents of plant outages and slight demand pick up.

Further, other pass-through charges also rose to P0.0219/kWh as the collection of the P0.0495/kWh feed-in-tariff allowance (FiT-All) charge resumed.

The Energy Regulatory Commission (ERC) suspended the collection of FiT-All in the April and May billing months to aid consumers affected by the lockdown measures.

Also, the regulator suspended the collection of Universal Charge-Environmental Charge of P0.0025/kWh this month as per its latest advisory.

Despite a monthly rate decrease, Meralco earlier advised some 2.8 million customers whose meters are yet to be read that their June bills will be higher as it will show their total actual consumption during the lockdown period.

The utility suspended meter readings during the quarantine period. As of May, 2.8 million or around 40% of its customers are not yet billed for their actual consumption since March.

WATER RATES UNCHANGED
In a statement on Monday, MWSS Chief Regulator Patrick Lester N. Ty said the board of trustees gave the go signal to retain the prevailing second-quarter foreign currency differential adjustment (FCDA), after evaluating the proposals of the two water concessionaires.

Maynilad Water Services, Inc., which is in charge of the west zone, will continue to apply an FCDA of -0.21% or P0.08 per cubic meter (cu.m.) of its average basic charge of P36.24 per cu.m.

East zone water provider Manila Water Co., Inc. will continue to implement an FCDA of 1.69% or P0.48 per cu.m. of its average basic charge of P28.52 per cu.m.

On March 13, the MWSS board of trustees approved the FCDA for the two water concessionaires.

The FCDA is a tariff mechanism which allows water concessionaires to regain losses or return gains caused by the movement of peso against other foreign currencies. The water providers pay foreign currency-denominated concession fees to MWSS, as well as loans that are used to fund projects to expand and improve water and sewerage services.

The announcement for zero rate adjustment came after the MWSS recently announced that water allocation for Metro Manila households will remain at 48 cubic meters per second until the end of the month.

In a statement on June 2, MWSS Administrator Emmanuel B. Salamat said the sustained water allocation is to address current high water system demands such as for sanitary measures like hand washing to mitigate the spread of the coronavirus disease 2019 (COVID-19).

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. — Adam J. Ang and Revin Mikhael D. Ochave