Meralco to hike rates in August

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GIVEN an increase in the cost of power supply, rates charged to customers of the Manila Electric Co. (Meralco) will also rise this month, the nation’s largest electricity distributor has announced.

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According to Meralco, its rates will increase by P0.31 per kilowatt-hour in August. This translates to a P62 increase in the monthly electric bill for customers consuming 200 kWh. “An increase in the generation charge, and higher universal charge, lifeline subsidy and taxes drove the overall upward adjustment,” Meralco said in a statement.

The company, however, stressed that it does not earn from the pass-through charges, which include the generation, transmission, and various tax and subsidy charges that appear on customer billing statements. The company explained that payments for the generation charge are passed through to power suppliers selling to Meralco through the Wholesale Electricity Spot Market (WESM) and under Power Supply Agreements (PSA), while payments for the transmission charge go to the National Grid Corp. of the Philippines. (NGCP).

“Of the total bill, only the distribution, supply, and metering charges accrue to Meralco,” Meralco said.

The generation charge for August 2014 will increase by P0.23 per kilowatt-hour, from P5.41 per kilowatt-hour to P5.64 per kilowatt-hour.

Contributing to the rate hike were adjustments in WESM prices, which accounted for approximately P0.17 per kilowatt-hour, while upward adjustments to existing PSAs account for the remaining P0.06 per kilowatt-hour of the increase. Because of the increases to generation charges, upward adjustments of universal charges, subsidies, and taxes add approximately P0.09 to the overall rate increase.

Meralco’s distribution charge remains unchanged, while the transmission charge went down by P0.01 per kilowatt-hour due to lower ancillary charges.

In justifying the move, Meralco said the hike in the cost of power from suppliers was driven by the shortfall in supply due to forced and scheduled outages of various plants, which were in turn further aggravated by the impact of Typhoon ‘Glenda’.

For the July supply month, a number of power plant units including Pagbilao 1 and Ilijan 1 and 2 pushed through with their scheduled outages for maintenance, while Unit 40 of the Sta. Rita plant remained out of service for repairs.

In addition, 20 forced outages of various durations were reported during the month due to Typhoon ‘Glenda’ or other causes, which further depleted availability of electric supply. Plants affected by these unplanned shutdowns included three units of the Sta. Rita plant, Calaca 1 and 2, GN Power 1 and 2, Sual 1 and 2, Pagbilao 2, Masinloc 1 and 2, San Lorenzo Units 50 and 60, Therma Mobile 2 and 4, and Quezon Power.

Meralco said the company sourced 53 percent of its total power requirements for the July supply month from PSAs, 40 percent from independent power producers (IPP), and 7 percent from the WESM.

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