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Meralco customers to pay 33¢ more per kWh this month

/ 05:27 AM April 12, 2012

Customers of Manila Electric Co. (Meralco), the country’s biggest power distributor, will pay an additional 33 centavos per kilowatt-hour (kWh) in generation charge this April.

The increase raised to P5.66 per kWh the generation charge, which accounts for about 56 percent of a household’s monthly bill.

Meralco on Wednesday said the increase was largely due to the rising demand for electricity and reliance on oil-fired power plants because of climbing temperatures.


“With the onset of summer, peak demand for power in the Luzon grid rose by more than 300 megawatts. Along with the reduced availability of hydroelectric plants, the grid relied on the more expensive oil-based power plants to meet power requirements,” Meralco said in a statement.

The utility said the cost of power it was buying from the wholesale electricity spot market (WESM) and independent power producers (IPPs) went up last month.

The power utility said the cost of power it purchased from the WESM, which contributed 7 percent of Meralco’s total power requirements in March, was higher by P2.46 per kWh than the level in February.

Mechanical trouble

The cost of power from its IPPs similarly rose by 24 centavos per kWh, due mainly to mechanical trouble, which affected  production at the Quezon Power coal plant.

Meralco got 44 percent of its electricity requirements last month from four IPPs—Quezon Power Philippines Ltd.’s coal-fed facility, the 1,000-megawatt Sta. Rita, the 500-MW San Lorenzo natural gas-fired plants and SEM Calaca’s 600-MW coal facility in Batangas. The Sta. Rita and San Lorenzo plants are owned by the Lopez-led First Gas Holdings.

Although WESM and IPP rates were up, the cost of power that Meralco purchased from the state-run National Power Corp. (Napocor) fell by 9 centavos per kWh.

Napocor supplied 49 percent of Meralco’s total requirements last month.


Meralco reiterated that the cost of power sold by the generating companies could fluctuate monthly based on several external factors such as the supply-demand situation, fuel prices and the foreign exchange rate.

The generation charge goes to the different generating companies and the WESM.

Considering that electricity consumption rises during the summer months, Meralco encouraged its customers to take energy conservation measures.

On top of the increase in generation charge for April, Meralco will start collecting this month the P2.3 billion worth of local franchise taxes it had paid between 1999 and 2009.

The amounts to be recovered from each area over the next five years will range from about 1 centavo to 4 centavos per kWh depending on the amount of local franchise taxes remitted to a local government.

The amount shall be reflected in the monthly power bill as “tax recovery adjustment cost.”

Not all areas, however, will be slapped with this additional charge. Affected are Meralco customers in the provinces of Bulacan, Batangas, Cavite, Rizal and Laguna; in the cities of San Jose del Monte, Batangas, San Pablo, Tagaytay, Lucena, Mandaluyong, Marikina, Quezon, Caloocan, Pasay, Las Piñas, Manila, Calamba and Pasig.

The Energy Regulatory Commission said that local franchise taxes levied by local governments and subsequently remitted by Meralco were legitimate expenses, which the law allows to be recovered from the customers, as these charges are considered a pass-through cost. Amy R. Remo

Originally posted at 07:20 pm | Wednesday, April 11,  2012

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TAGS: April, Consumer issues, Electricity, Energy, Manila Electric Co., MERALCO, Meralco bills, Meralco generation charge, Power Distribution
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