Manila Electric Company (Meralco) said on Wednesday that power rates will increase in February.
Meralco President Oscar Reyes said there are already indications for an upward movement of power rates for next month.
One of the indicators, Reyes said, is the high electricity rate at the wholesale electricity spot market (WESM) due to scheduled shutdowns of power plants.
“So one, higher price in electricity spot market. While we are sourcing only a small portion, that affects the overall situation. There may be a higher generation charge for February,” he told reporters.
Reyes, however, said they still have to wait for the final computation of the generation charge for the February rate.
Lawrence Fernandez, Meralco senior vice president, said that the multiple simultaneous plant outages definitely affect the prices of electricity at WESM.
He said reports show that on top of around 1,000 megawatts (MW) of capacity outage under scheduled maintenance, another 1,400 MW is under forced or unscheduled outage.
“We are awaiting the billing of WESM to see how all these outages affected spot market prices,” he said.
Fernandez said Meralco is also awaiting billings from natural gas-fired generators (San Miguel-South Premiere, First Gas-Sta. Rita, First Gas-San Lorenzo), which would be partly based on average oil prices from July to December 2014.
Based on the December 2014 supply month, natural gas-fired plants (Sta. Rita, San Lorenzo, Ilijan natural gas plants) accounted for about 60 percent of Meralco’s energy supply, while coal-fired plants accounted for around 37 percent.
The remaining three percent is a mix of oil-based and energy sourced from the WESM.
Energy Undersecretary Zenaida Monsada said the low oil prices may also affect power rates.
Monsada said the price of the Malampaya natural gas, used by three power plants in Luzon, is indexed to oil prices that have been on the decline.
Fernandez echoed Monsada’s statement that the price of Malampaya natural gas is adjusted per calendar quarter.
“The new natural gas price will be reflected in the generators’ bills to Meralco this January supply month, which would then be an input to the computation of the generation charge for the February bills to customers,” Fernandez said.
However, Fernandez said the natural gas price is based on a basket of indexes, which includes oil prices.
“The natural gas price for January-March 2015 will partly be based on the average oil prices for the six-month period of July-December 2014. The natural gas price for October-December 2014 was partly based on average oil prices for the 6-month period of April-September 2014,” he said.
He said the power adjustment for the month of February will still be based on the billings from the generators and the spot market.
“We will need to await the billings from the generators and the spot market. As a distribution utility, we are mandated to reflect the actual cost from generators in the generation charge to customers,” he said.
Meralco’s power rates went down by 19 centavos per kilowatt-hour for January, the third straight month of lower power rates.
The firm on Wednesday unveiled a two-level multi-purpose facility that can test the power consumption of appliances and gadgets.
Al Panlilio, Meralco senior vice president and head of Customer Retail Services and Communications said the Meralco Power Lab will educate Filipinos about electricity usage and help them understand the impact of energy management in their daily lives.