Meralco rates seen lower in January

Customers of Manila Electric Company (Meralco) can expect a New Year relief in their electricity bills – mainly due to anticipated downtrend in the generation charge component.

This was indicated by the utility firm, emphasizing that such will be “due to lower capacity fees from power generation arising from fewer power outages.”

Meralco Spokesman Joe Zaldarriaga intimated “hopefully, there will be another reduction in January… if we will use historical records as basis, normally rates are lower in January.”

He qualified though that “January rates will still have to factor in the final computation from generators and transmission operator.”

Zaldarriaga added “these would reflect such factors as the exchange rate and the supply-demand situation, which would also affect generation and transmission charges.”

The Meralco executive stressed “generators are given a particular outage allowance per year,” and such, he emphasized are essentially translated into capacity fees.

As explained, capacity fees are determined through the annual reconciliation of outage allowances that is done at the end of each year – reckoned from the contracts as approved by the Energy Regulatory Commission. Zaldarriaga said “the generators have a capacity fee per year which is divided by the number of days that they are available.” He expounded “if power generators do not exceed their outage allowances, their capacity fees are already paid in full and would no longer be reflected for the month of January.” Of all the cost components, it is often the generation charge that incurs wild swings on a monthly basis – and the corresponding adjustments are reflected in the electric bills of consumers.