MANILA, Philippines—Temperatures are still uncharacteristically low at this time, but power rates are rising.
Customers of Manila Electric Co. (Meralco), a company now controlled by the Manuel V. Pangilinan group, will be paying more this month as the generation charge will go up by 20.13 centavos a kilowatt-hour (kWh) to P5.0474 per kWh.
The power rate increase comes amid rising prices of petroleum products, food, toll and practically all essential goods and services.
On Tuesday, oil firms raised prices of gasoline by 25 centavos per liter. It was the 11th price increase for gasoline since the beginning of the year that has resulted in a cumulative increase of P7.50 a liter.
Oil firms had cut gas prices by a total of only P1.75 a liter since January.
The power rate increase means that households consuming 200 kWh will have to shell out an additional P40.26 in their monthly bills. Households consuming 300 kWh can expect a P60.39 jump in their April bills.
Still, this month’s generation charge is lower than that in April last year, when it rose to P6.7699 per kWh, Meralco said in a statement.
Generation charge accounts for about 60 percent of a customer’s average monthly power bill. The amount goes directly to Meralco’s power suppliers.
Last year, 4.41 million of Meralco’s 4.8 million customers were households found in 31 cities and 80 municipalities in Metro Manila, Bulacan, Rizal and Cavite, and parts of Laguna, Quezon, Batangas and Pampanga.
Billing adjustments
Meralco said actual costs of electricity from two of its suppliers—the wholesale electricity spot market (WESM) and its independent power producers (IPPs)—had declined.
However, Philippine Electricity Market Corp., operator of WESM, made some billing adjustments in Meralco to reflect the costs incurred by the so-called “must-run units” in May 2010.
When a facility has been declared a must-run unit, it will have to operate and charge according to prevailing spot market prices.
Should these prices prove to be lower than the true cost of operating the facility at that time, the power generation firm can recover these costs later on.
WESM cost rose to P9.64 per kWh from only P4.28 per kWh last month.
Napocor, IPPs
Meralco gets 2.5 percent of its electricity requirements from WESM, 47 percent from state-run National Power Corp. (Napocor) and 50.4 percent from the IPPs, which continue to be the company’s cheapest source of electricity.
The distribution utility buys from three IPPs—Quezon Power Philippines Ltd.’s coal-fired facility, the 1,000-megawatt (MW) Sta. Rita and the 500-MW San Lorenzo natural gas-fired power plants, which are both owned by the Lopez-led First Gas Holdings.
Meralco reported that IPP rates went down by 2.4 centavos per kWh, while the cost of power from Napocor rose by 1 centavo per kWh.
The cost of electricity sold by the generating companies could move from month to month based on many factors beyond Meralco’s control. These include fuel and WESM prices, the foreign exchange rate and dispatch of the IPPs.
Meralco has advised its customers to prepare for the coming summer months as power prices historically increase during this time. But the weather bureau earlier said temperatures would be lower this summer because of La Niña.
Power consumption also tends to shoot up during the summer months as appliances work doubly hard in warm weather and more household members use electricity during the school break.
Meralco power company has also advised customers to observe energy efficiency tips during this time of the year, including opening the refrigerator only when needed, unplugging unused appliances and ironing clothes in bulk.
High fuel prices
Pilipinas Shell Petroleum Corp. and Chevron (formerly Caltex) raised gasoline prices Tuesday while Phoenix Petroleum Philippines started implementing its price hike Wednesday.
The Department of Energy (DoE) said the latest price increase pushed up gasoline prices between P52.10 and P58.12 a liter, almost nearing the record high of about P60 a liter in 2008.
The DoE said the conflict in North Africa and the unrest in the Middle East, along with fears of potential global supply disruptions, were causing a volatility in oil prices.
“World oil prices started the week at lower levels but slowly firmed up by the end of the week as investors remained focused on geopolitical risks and the outlook for global energy demand,” the DoE said in a report.