Meralco rates up by 25¢

MANILA, Philippines - After six consecutive months of rate reductions, the Manila Electric Co. (Meralco) yesterday said its customers will pay 25 centavos per kilowatt-hour (kWh) more in their electricity bills this month.

Meralco vice president and utility economics head Ivanna de la Peña said the increase in generation charge was brought about by the rise in the cost of power purchased by Meralco from the National Power Corp. (Napocor) and its independent power producers.

De la Peña explained that the increase for the month of November should have been 32.7 centavos per kilowatt- hour but less a refund in its transmission charge and deferred power purchase agreement (PPA) amounting to six and 1.7 centavos per kWh, respectively.

“This adjustment in the generation charge will, however, be tempered by the reduction in transmission charges and the deferred PPA refund ordered by the ERC (Energy Regulatory Commission),” she said.

She said with these mitigating factors, customers will see a net increase of about 25 centavos per kWh.

“The cooler weather at this time of the year would also temper the effect of the said generation rate adjustment on the overall bills of customers,” the official added.

De la Peña said, “The increase in generation charge was due to a number of factors including the lower dispatch of IPP following reduced consumption in the October supply month (Sept. 26 to Oct. 25, 2009) after the series of typhoons that hit Manila and other parts of Luzon caused massive power outages. Add to this the prolonged power outages in some portions of the Meralco franchise area resulting from the trouble in one of the transformers in the Dolores Substation of the National Grid Corporation of the Philippines (NGCP).”

Higher cost of power sourced from the Napocor and the Wholesale Electricity Spot Market (WESM) likewise contributed to the overall increase in the generation charge.

The Meralco official said higher fuel cost and the slight depreciation of the peso were also among the factors responsible for the rise in overall generation costs.

De la Peña stressed, though, that even with the increase, the generation charge of P4.2286 per kWh this month is still lower than levels prevailing in the first semester of 2009 which peaked at P5.02 per kWh in April.

“In fact, the rate this month is still lower than the P4.26 per kWh generation charge in June and July 2009,” she said.

Meanwhile, Meralco external communications manager Joe Zaldarriaga clarified that “after a series of reductions in the generation charge for the past six months, it is not surprising to expect that sooner or later, the rates will register an upward movement.”

“As we have been explaining to our customers, the generation charge may vary from month to month depending on the cost of energy supplied by the power producers, and this recent adjustment merely reflects the interaction of various factors contributing to the effective cost of power generation.”

Meralco has consistently stated that it does not earn from the generation charge since it is merely a pass through charge which may go up or down depending on the cost of the energy that Meralco purchases from its suppliers. – Donnabelle Gatdula - (Philstar News Service, www.philstar.com)