Power rates down this month; water hike looms
Customers of Manila Electric Co. (Meralco) will see a reduction of 14.58 centavos per kilowatt-hour (kwh) this month on lower spot market prices and a drop in transmission charges.
Meanwhile, the public should brace for more water rate increases as the government’s decision on the mandatory rate rebasing will be implemented on a staggered basis for the next four years.
Overall rates of Meralco went down from P10.219 per kwh last month to P10.0732 per kwh this month.
This means a typical household consuming 200 kwh will see a decrease of P29.16 in their total bill; a decline of P43.74 for 300 kwh; P58.32 for 400 kwh; and P72.9 for 500 kwh.
“We are pleased to announce that despite the recent figures released on inflation and a slight depreciation of the peso, Meralco customers can find some relief in the decrease of power rates this month, as this goes against the current trend that we see with other basic goods and commodities,” Meralco spokesman and public information office head Joe Zaldarriaga said.
The power distributor attributed the bill reduction to lower wholesale electricity spot market (WESM) prices, which pulled down the generation charge.
The generation charge decreased P0.772 per kwh from P5.3491 per kwh to P5.2719 per kwh.
Meralco said this resulted from the P2.0768 per kwh slide in WESM charges due to less power plant capacity on outage and lower average demand for power in Luzon.
WESM purchases amounted to 21 percent of Meralco’s total requirement this month.
Meralco said the decrease in WESM charges offset a P0.6112 per kwh and a P0.3287 per kwh rise in the cost of electricity from power supply agreements (PSAs) and independent power producers (IPPs), respectively.
Both PSA and IPP charges increased partly because of higher fuel prices and peso depreciation. PSA and IPP purchases to Meralco’s total requirement this month was 39 percent and 40 percent, respectively.
In terms of other bill components, the transmission charge of residential customers decreased by P0.0292 per kwh due to lower ancillary charges of the National Grid Corp. of the Philippines.
With the lower generation and transmission charges, taxes and other charges also went down by P0.0394 per kwh during the period.
Water rate increases
The Metropolitan Waterworks and Sewerage System-Regulatory Office (MWSS-RO) is set to finish today the final leg of public consultations for concessionaires Maynilad Water Services Inc. and Manila Water Co. Inc.
After the consultation, MWSS will present the final rates to the MWSS Board of Trustees for approval.
“If we get approval by next week, it will take effect starting Oct. 1,” MWSS chief regulatory Patrick Ty told The STAR in a phone interview.
“We can’t really say what they will do because RO is just on the technical, they (board members) are the ones to decide. It is not definite, the board can choose not to proceed with the increase but we would have to challenge that,” he added.
So far, MWSS has only released the indicative rate for east zone concessionaire Manila Water with a range of P6.26 to P6.55 per cubic meter.
The Ayala-led water company originally requested for an P8.30 per cubic meter upward adjustment.
Once approved, Manila Water customers will see a P1.50 per cubic meter increase starting next month, another P2 each for 2020 and 2021 and another P0.76 to P1.05 per cubic meter by 2022.
This would translate to an increase of P6.02 per month for those consuming below 10 cubic meters; P9.68 for those 10 to 20 cubic meters; and up to P20.30 for 20 cubic meters and above.
MWSS is set to release the indicative rates for west zone concessionaire Maynilad today. The Pangilinan-led company has requested for an P11 per cubic meter increase.
The mandatory five-year rate rebasing for Maynilad and Manila Water has long been delayed due to the change in MWSS administration.
Based on the concession agreement, rate rebasing determines the level of rates for water and sewerage services that permits both concessionaires to recover over the life of the concession period its operating, capital maintenance and investment expenditures.
The failure to implement the rate rebasing decision in 2013 is one of the major factors that will affect the decision this month.
Both concessionaires had requested for an increase in rates but the previous MWSS-RO decided to lower this, eventually resulting in arbitration cases that are yet to be resolved.
The rates were also based on the business plans submitted by both concessionaires.
Based on the plan, Maynilad will allocate P30.2 billion in the first five years to cover the capacity of 320 million liters per day (MLD) and P101.4 billion for the rest of period to cover 1,128 MLD. It plans to spend a total of P131.6 billion in the next 19 years for sewage treatment alone.
East zone concessionaire Manila Water, on the other hand, will invest P37.44 billion for 725 MLD this year up to 2022 and pour in P116 billion onwards for 222 MLD. The Ayala-led company is allotting P153.4 billion for this plan.