Power rates up in April


POWER consumers in areas serviced by the Manila Electric Co. (Meralco) will have to find “energy-efficient” ways to cool down this summer after the utility giant announced a rate increase beginning April.

In a statement on Wednesday, Meralco said electricity bills will go up by 27 centavos per kilowatthour (kWh) because of a hike in generation charge brought about by the shutdown of the Malampaya natural gas plant facility in Palawan.

Aside from the generation charge, taxes and other charges also registered increases of 5 centavos per kWh and 3 centavos per kWh, respectively.

The transmission charge, on the other hand, registered a decrease of 1 centavo per kWh.
Meralco reiterated that it does not earn from the pass-through charges, such as the generation and transmission charges.

Payment for the generation charge, it said, goes to power suppliers, such as plants selling to Meralco through the Wholesale Electricity Spot Market (WESM) and under the power supply agreements (PSAs), as well as the independent power producers (IPPs).

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.
The utility’s distribution charge has not registered any adjustment and has remained at the same level since July 2014.

The Luzon grid is dependent on Malampaya, which fuels three power plants: Santa Rita (1,000 megawatts); San Lorenzo (500 MW); and Ilijan (1,200 MW). The Santa Rita and San Lorenzo power plants are owned by Lopez-led First Gen Corporation. Ilijan is owned by Kepco Philippines.

Shell Philippines Exploration B.V. (SPEX), which operates the Malampaya plant, earlier said it will try to complete maintenance work on the facility ahead of the 30-day shutdown that started March 15.

Meralco said that after a reduction in electricity rates last month, overall rates went up by 27 centavos per kWh this April.

It added that generation charge rose by 20 centavos per kWh from P5.21 in March to P5.41 per kWh.

The 20 centavos per kWh addition was lower than the 46 centavos per kWh increase in generation charges announced earlier.

Meralco said the overall electricity rate for this year is lower by 81 centavos at P10.68 per kWh than 2014’s P11.49 per kWh.

But households with 200 kWh consumption could still expect their power bills to go up by P54 this month.

“The ​main driver of the higher electricity rates this month is a 20 centavos per kWh adjustment in the generation charge,” Meralco said in a statement.

The generation charge is the portion of the bill that goes to power plants that produce electricity.

The higher generation charge was attributed by Meralco to the shift to liquid fuel and diesel during the 30-day Malampaya shutdown.

The three natural gas power plants–Santa Rita, San Lorenzo and Ilijan–shifted to liquid fuel and diesel, which are more expensive than natural gas.

“​Due to the 30-day maintenance shutdown of the Malampaya Deepwater Gas-to-Power facility, several large power plants had to use more expensive liquid fuel to continue operations,” Meralco said.

In particular, the 1,000-megawatt (MW) Santa Rita and 500-MW San Lorenzo plants shifted to condensate, while the 1,200-MW Ilijan now uses biodiesel.

“These types of alternative fuel are more expensive than the natural gas from Malampaya, which these plants normally use,” Meralco said.

The change in fuel of Ilijan, according to the utility, also resulted in a lower output level for one of its two blocks (Ilijan A), from its maximum capacity of 600 MW to an average of 292 MW during the first 10 days of the Malampaya shutdown.

The shutdown started March 15 and ended March 25, also the last day of the March supply month.

The other block of Ilijan (Ilijan B, 600 MW) is on scheduled preventive maintenance.
As a result of the shift to liquid fuel by the three plants, rates of the IPPs and PSAs increased.

Rates of the IPPs went up by 17 centavos per kWh, partly tempered by the return of QPPL (Quezon Power Philippines Ltd.) from a maintenance shutdown while rates from PSAs went up by 31 centavos per kWh.

These were mitigated by a P1.55 per kWh reduction in charges from the WESM, as the power supply situation remained normal since there were fewer forced outages of power plants during the March supply month.

Before the maintenance shutdown, the he Philippine Independent Power Producers Association Incorporated (PIPPA) had said they expect power rates to increase by at least one peso per kWh.

“I guarantee that there will be a spike because that happens whenever Malampaya shuts down,” PIPPA President Luis Miguel Aboitiz said.

“Once the gas plans shift to liquid fuel, there’s around one peso per kWh automatic increase,” he added.

Meralco, however, pointed out that April’s generation charge of P5.41 per kWh was lower than those in months that were also affected by a Malampaya shutdown.

In March 2010, November 2011 and August 2012, the generation charge had reached P5.84, P5.79, and P6.74 per kWh, respectively.

The share of IPPs, PSAs and WESM to Meralco’s total power requirements stood at 46, 50, and 4 respectively.



Please follow our commenting guidelines.

1 Comment

  1. Spitzgeschoss on

    It’s too bad that despite Meralco’s efforts to reduce their own transmission charge (not to mention their plan with the Department of Energy to utilize mall generators), the hefty generation charge of the power producers cancels these efforts out. Indeed, all we can do is practice discipline in energy saving.