The Manila Electric Co. (Meralco), the country’s largest power distributor, on Friday announced that there will be an increase in the rate for a typical household this February 2017 by P0.92 per kilowatthour, bringing the overall rate to P9.00 per kWh.
The increase this month results from an upward movement in the generation charge.
A 7-year low overall rate of P8.09 per kWh in January 2017, Meralco said, would bring the running average overall residential rate for 2017 to P8.55 per kWh.
This is still P2.17 per kWh lower than the 2014 average rate of P10.72 per kWh, and P0.89 per kWh lower than the 2015 average rate of P9.44 per kWh, approximating the 2016 average of P8.50 per kWh.
Normalization of capacity charges and lower dispatch have caused generation rate increase.
January 2017’s record low generation charge since October 2004 of P3.70 per kWh largely stemmed from a reduction in capacity fees arising from the annual reconciliation of outage allowances that is done at the end of each year, under contracts approved by the Energy Regulatory Commission (ERC).
The reduction in capacity fees every January represents savings immediately passed on to consumers by way of lower electricity rates.
The capacity fees, particularly of Pagbilao and Ilijan, returned to normal levels this February, pushing up the generation charge by P0.62 per kWh from P4.32 per kWh.
Contributing to the adjustment was the lower dispatch of Power Suppy Agreements (PSAs) and Independent Power Producers (IPPs) because of a variety of scheduled and forced outages.
Calaca, Masinloc, Quezon Power and First Gas-Santa Rita underwent scheduled shutdowns, while the Ilijan power plant was isolated by transmission line troubles by Typhoon Nina.
Demand in January 2017 was also about 400 megawats lower compared to the December 2016 level.
Remainder of the increase in the generation charge was caused by higher fuel prices, partly from the quarterly repricing of Malampaya natural gas, and a slight depreciation of the peso against the US dollar.
The share of PSAs this month stood at 38.6 percent, while the share of IPPs was at 38.1 percent.
Overall charges from the Wholesale Electricity Spot Market (WESM) decreased by P0.25 per kWh in January 2017, mitigating further increases in the generation charge.
The share of WESM purchases in Meralco’s total requirements went up from 21.8 percent to 23.2 percent.
This month, there was an increase in the transmission charge of residential customers by P0.15 per kWh because of an increase in Power Delivery Service Charges caused by the National Grid Corporation of the Philippines’ (NGCP) implementation of higher Interim Maximum Allowable Revenue (iMAR).
Higher Ancillary Service Charges also contributed to the increase in the transmission charge.
Taxes and other charges similarly went up by a combined amount of around P0.15 per kWh.
Meralco’s distribution, supply and metering charges, meanwhile, have remained unchanged for 19 months, after these registered reductions in July 2015.
The power distributor has reiterated that it does not earn from the pass-through charges, such as the generation and transmission charges.
Payment for the generation charge goes to the power suppliers, while payment for the transmission charge goes to the NGCP.
Meanwhile, Meralco said over 42,000 franchise customers are now in Kuryente Load (KLoad), Meralco’s prepaid electricity service.
Its prepaid electricity service is an easy and affordable way for Meralco customers to monitor electricity consumption through mobile phone text notifications and manage electricity expenses with budget-friendly load denominations for as low as P100.
Another useful feature of Kuryente Load is that because the system runs on the latest “smart” meters, Meralco can detect outages instantly, allowing for faster power restoration in times of need.
Recently, it announced that it was ready to accept an additional 100,000 prepaid customers that was approved by ERC for this year.
Aside from Manila, Pasig City and parts of Rizal province, KLoad is now also available in Mandaluyong City, and coming soon to Makati City.
By the end of 2017, Meralco plans to bring KLoad to the following areas: Quezon City, Caloocan City, San Juan City, Marikina City, Taguig City, Pasay City and Pateros town.
Based on Meralco’s consumer research, customers who shifted from postpaid to prepaid are able to effectively monitor their consumption daily via SMS and as a result, they have saved an average of 20 percent on electricity consumption.
This translates to total savings of around P300 per customer.