October power rates up 10 centavos per kWh

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AFTER a 58-centavo per kilowatthour (kWh) cut in electricity rates in September, rates will go up by about 10 centavos per kWh in October.

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For a typical household consuming 200 kWh, this month’s adjustment is equivalent to an increase of about P20 in its bill.

The Manila Electric Co. (Meralco) attributed the increase principally to the rise in the generation charge.

The generation charge, which had dropped by 44 centavos per kWh in September, went up by 159 centavos per kWh from September’s P5.19 per kWh level to P5.35 per kWh.

The generation charge, therefore, yielded a net reduction of 28 centavos per kWh over the past two months.

Meralco said the increase for October was primarily due to the five-day Malampaya restriction (September 8 to 11 and September 21 to 23), which forced the Santa Rita and San Lorenzo power plants to use more expensive liquid fuel in lieu of natural gas.

“This resulted in higher generation costs from these plants. This Malampaya restriction also reduced dispatch of the Ilijan power plant during the September supply month,” it added.

Meralco said weakening of the peso against the dollar, from P43.590 to P44.875 this month, contributed further to the higher generation charge.

The use of alternative fuel by the natural gas plants accounted for 13 centavos per kWh of the increase, while the higher foreign exchange rate added another 8 centavos per kWh.

“If not for these upward adjustments, the generation charge would have gone down by 5 centavos per kWh,” Meralco said.

Independent Power Producers (IPPs) (where Sta. Rita, San Lorenzo and Quezon Philippines Power Ltd. fall) registered a 44-centavo per kWh average increase.

Meanwhile, plants under the Power Supply Agreements (PSAs), as a whole, went down by a centavo per kWh.

The Wholesale Electricity Spot Market (WESM) also registered a reduction of P7.45 per kWh.

The presence of the secondary WESM price cap helped moderate WESM charges and protected customers in spite of the successive restrictions of Malampaya (that limited the output of Ilijan) and the outage of some power plants (both scheduled and forced).

In terms of share to Meralco’s total power requirements for the September supply month, PSAs, IPPs and WESM accounted for 53, 46 and 1 percent, respectively.

Also adding to the increase is the P0.007 per kWh increase in taxes.

The transmission charge, meanwhile, registered a P0.054 decrease per kWh. There was also a cumulative decrease of P0.008 per kWh in subsidies and the system loss charge.
Meralco 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 such as the plants selling to Meralco through the WESM and under the PSAs, as well as the IPPs,” it said.

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.

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1 Comment

  1. why can’t congress enact a law that allows for tapping of malampaya royalty fees to subsidies electricity rates in form of stabilization fund? instead of exposing consumers to the ups and down of electricity rates that is prone to manipulation by oligarch friends of a sitting president, the fees can be used to pay for the increase in fuel cost and currency fluctuations. consumers are then assured of stabilized price of electricity year round (subject to adjustments from fluctuations of fossil fuel prices and currency exchange). steady electricity rates would be good for business and consumers alike in planning finances annually.

    malampaya funds are being looted by politicians and government officials to enrich themselves anyway -if not rewarding themselves with perks and fat bonuses. it’s about time ordinary citizens enjoy the natural resources of the country!