Meralco bills up for 5th straight month

MANILA ELECTRIC Co. (Meralco) is raising by P0.3436 per kilowatt-hour (/kWh) the overall electricity rate for November due to increases in generation and transmission charges.

“The November rate increase is mainly due to the P0.1925/kWh increase in generation charge,” Meralco said.

The adjustment brings the power rate for residential consumers to P9.6272/ kWh from P9.2836/kWh in October.

For households using 200 kWh — the biggest residential consumer segment — the increase translates to a rise of P68.72 in their total bill for the month. Those using 300 kWh, 400 kWh and 500 kWh, will see corresponding increases of P103.08, P137.44 and P171.80, respectively.

The tariff increase supports expectations of a further hike in inflation rate, since electricity accounts for 4.51% of the theoretical basket of widely used goods and services on which the annual change in overall price increase is computed.

Meralco said the generation charge in November — reflecting what the utility paid plants for electricity purchased in the October supply month — rose by P0.1925/ kWh to P4.9080/ kWh from P4.7155/kWh in the October bill. It said the rise was primarily because of higher charges from the Wholesale Electricity Spot Market ( WESM) and the depreciation of the peso against the dollar. Charges at WESM rose by P0.4810/kWh.

“Despite the reduction in Luzon power demand this month, spot market prices increased due to tighter supply conditions,” the listed company said.

It said the share of WESM to the power utility’s total requirements for November was 15%.

Meralco said the cost of power from independent power producers (IPPs) increased with the weakening of the peso against

the dollar. “Peso depreciation had a much larger impact on IPP costs because around 97% of IPP costs are dollar- denominated,” Meralco said.

It said the impact of the weak peso on power supply agreements (PSAs) was cushioned by a lower share of costs denominated in US dollars at about 58%.

The P0.2868/ kWh increase in the cost of IPPs may also be attributed to lower average plant dispatch after the scheduled shutdown of a module of the 500-megawatt San Lorenzo power plant in Batangas City for the entire supply month, the company said.

It said despite higher fuel prices, the increase in cost of PSAs was softened to P0.0076/ kWh because of the improvement in average plant dispatch.

“The shares of IPPs and PSAs to Meralco’s total requirements stood at 41% and 44%, respectively,” Meralco noted.

Also contributing to higher November power rates was the P0.086/kWh rise in transmission charge for residential consumers. Meralco attributed this to higher ancillary service charges from the National Grid Corporation of the Philippines (NGCP).

Taxes and other charges also rose by P0.0651/kWh during the month, the utility said.

“Meralco’s distribution, supply, and metering charges, meanwhile, have remained unchanged for 28 months, after the registered reductions in July 2015,” it said.

Meralco does not earn from pass- through charges such as generation and transmission charges as these are remitted to power suppliers and NGCP, respectively.

November is the fifth consecutive month of Meralco rate hike after October’s 0.0345/kWh, September’s P0.8642/kWh, August’s P0.1338/kWh and July’s 0.0761/ kWh.

Taxes and other pubic policy charges such as the feed-in-tariff allowance, known by the acronym FiT-All, are collected by 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., which has interest in BusinessWorld through the Philippine Star Group, which it controls. —