Meralco customers to brace for power rate hikes up to May

Aside from the P0.92 per kilowatt hour (kwh) increase in this February billing, it will be a summer of discontent for customers of the Manila Electric Company (Meralco) as the rate hikes in their bills would stretch through May with the proposed staggered pass-on of additional R0.9174 per kwh starting in the March billing cycle.

In just two-month span, the estimated increase that consumers would be bracing for would be a total of R1.8374 per kwh, notwithstanding yet the propounded staggered cost recovery for the next billing.

Fully aware of the cost impact of the fuel shift of some plants during the Malampaya shutdown, Meralco said it advanced application to stagger the estimated rate hike for March billing cycle at increments of R0.30 per kWh twice; and the last stretch of R0.32 per kWh in the third tranche.

It is already common knowledge though that during summer months, power rates generally climb due to factors such as increase in demand that could tighten supply; and cyclical de-rating of some generating facilities, such as the hydros, that may then prompt the utilization of power plants with more expensive fuels.

At this point, Meralco customers must expect at least four months of highly probable upticks in their electric bills. The same extent of increases at R0.92 per kwh in February and March billings, according to sources from the power distribution firm, had just been coincidental.

In its filing with the Energy Regulatory Commission (ERC), Meralco noted that the estimated R0.9174 per kwh hike for March would account for the R2.4 billion worth of fuel that its contracted gas plants would be utilizing on fuel shift during the gas facility’s scheduled maintenance downtime.

“To mitigate the effect of an abrupt increase in generation cost due to the use of liquid fuel, especially considering that the WESM (Wholesale Electricity Spot Market) prices may also increase during this period, Meralco proposes that instead of reflecting the full incremental fuel cost component of the total generation cost in the March 2017 generation charge rate, it be allowed to implement the increase in three billing months starting March until May 2017,” the utility firm has stipulated in its petition.

The company has qualified though that the figure applied for was just an estimate, and that it may be adjusted correspondingly when the final billings from its power suppliers would be submitted.