Meralco bill to go down in May as generation charge dips | Inquirer News

Meralco bill to go down in May as generation charge dips

By: - Reporter / @amyremoINQ
/ 07:46 PM May 08, 2012

MANILA, Philippines—Customers of the Manila Electric Co., the country’s biggest power distributor, can expect their electricity bills to go down in May as the generation charge fell by 6.38 centavos per kilowatt-hour to P5.5983 per kWh.

Meralco’s utility economics head Lawrence Fernandez said in an interview that households consuming 101 kWh a month could expect a decrease of P6.44 in their electric bills, while those that have been using 200 kWh a month would enjoy a P12.76-reduction for May.

Households that consume 300 kWh and 400 kWh monthly could also expect decreases of P19.14 and P25.52, respectively, he added.

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According to Meralco, the reduction in power rates would have been bigger if not for the increase in the rates of state generator National Power Corp. effective this month. Meralco secured 52.8 percent of its power requirements from Napocor in April, the company said in a statement issued on Tuesday.

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To recall, the Energy Regulatory Commission issued an order last March, allowing Napocor to hike its generation charge in Luzon by 69.04 centavos per kWh, Visayas by 60.60 centavos per kWh and Mindanao, by 4.42 centavos per kWh. These amounts will be collected by distribution utilities from end consumers within the next eight to 10 years.

These approvals covered the joint applications filed by Napocor and the Power Sector Assets and Liabilities Management Corp. for a rate increase under the generation rate adjustment mechanism (GRAM), which allows utilities to recover costs associated with fuel and purchased power, and incremental currency exchange rate adjustment (Icera) mechanism, which allows utilities to recover foreign exchange-related costs.

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Meralco, however, noted that the increase in Napocor rates was tempered by “downward adjustments in the charges of the wholesale electricity spot market (WESM) and the independent power producers (IPPs).”

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WESM prices, according to the distribution utility, were moderated by the increased output of coal-fired power plants and continued support from power imported from the Visayas.

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The cost of power source from WESM, which contributed 4.3 percent of Meralco’s power requirements, fell by 94 centavos per kWh, during the supply month of April.

At the same time, the cost of power obtained from the IPPs also decreased by 21 centavos per kWh, due mainly to the increased output of the Quezon Power facility.

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Meralco got 42.7 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.

Meralco reiterated anew 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.

As part of its sourcing strategy, Meralco buys power from different sources to obtain adequate and reliable power at the most reasonable price.

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The generation charge, which accounts for about 56 percent of one’s total electricity bill, goes to the different generating companies and the WESM.

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