CUSTOMERS of leading power utility Manila Electric Co. (Meralco) may expect lower electricity bills for this month because of an expected reduction in the generation charge.
Meralco head of utility economics Larry Fernandez said they are expecting a lower generation charge in December because of the lower average load weighted average price (LWAP) at the Wholesale Electricity Spot Market (WESM).
Fernandez said WESM results show that the November LWAP was lower than that of October.
“This appears to show that we may see a reduction in the generation charge this December,” he said.
But they are still waiting for complete information from suppliers before making a formal announcement, he said.
Last month, Meralco slashed its rates by 41 centavos per kilowatt hour (kWh), or a decrease of around P82 in the bill of a typical household consuming 200 kWh.
Meralco attributed the rate cut in November also to a lower generation charge due to fewer forced plant outages and normal Malampaya operations.
In November, the generation charge decreased by 245 centavos per kWh to P5.11 per kWh, its lowest for the year to date.
October’s generation costs increased mainly due to a cumulative five-day Malampaya restriction (September 8 to 11 and September 21 to 23), which reduced the fuel supply to Ilijan and forced the First Gas plants to use more expensive alternative fuel.
With fewer incidents of simultaneous forced outages of power plants, the secondary price cap at the WESM was not triggered during the October supply month and WESM charges registered a reduction of P25.61 per kWh.
Meralco said it will not be affected by the power rate reduction because it is not being paid from the pass-through charges, such as the generation and transmission charges.
Payment for the generation charge goes to the power suppliers such as the plants selling to Meralco through the WESM.
Payment for the transmission charge, meanwhile, goes to the National Grid Corporation of the Philippines (NGCP).
Of the total bill, only the distribution, supply, and metering charges accrue to Meralco.