Expect hike in March generation charge

by Lenie Lectura, 04 March 2015
from BusinessMirror

Generation charge for March electricity bills is expected to go up due to higher prices at the Wholesale Electricity Spot Market (WESM), an official of the Manila Electric Co. (Meralco) said on Wednesday.

“We are still waiting for billings from independent power producers/power supply agreements [IPPs/PSAs], but WESM results appear to point to higher market prices,” Meralco Utility Economics Head Larry Fernandez said in a text message.

A Meralco bill is made up of many charges. The largest component is the generation charge, or the portion of the bill that goes to the generation companies or power producers.

Meralco sources its power requirements from the WESM, PSAs and IPPs.

Fernandez explained that higher demand for electricity and the lower dispatch levels of power plants that went offline could be the reasons for higher WESM prices recorded during the supply month of February that will be reflected in the March billing of Meralco customers.

“This maybe due to an increased demand, as peak went up by around 200 megawatts from January to February, coupled with more capacity on outage like the Masinloc and Quezon Power,” the Meralco official added.

The utility firm, which recorded 5.6 million customers at end-2014, will release next week the final adjustment for the March power bills.

Last month Meralco announced that all bill components for February shoot up to P10.51 per kilowatt-hour (kWh). The upward adjustment also translates to an increase in overall power rates by P168 for consumers with a monthly consumption of 200 kWh; P252 for 300 kWh; P336 for 400 kWh; and P420 for 500 kWh.

Generation charge went up by P0.52 per kWh to P5.24 per kWh due to a P1-per-kWh increase in the rates of generation companies under the PSA, as capacity fees normalized from a low level in the preceding month.

Transmission charge also went up by P 0.12 per kWh to P0.99 per kWh. Taxes increased by around
P0.08 per kWh to P1 per kWh, while other charges such as system-loss charge and lifeline subsidy increased by P0.08 per kWh to P0.55 per kWh and P0.14 per kWh, respectively.

The February 2015 billing will also reflect the new Feed-in Tariff allowance charge of P 0.04 per kWh, a uniform charge that will be billed to all on-grid electricity consumers nationwide in support of the Feed-in-Tariff Program.

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. Payment for the transmission charge, meanwhile, goes to the National Grid Corp. of the Philippines. Of the total bill, only the distribution, supply and metering charges accrue to Meralco.

Distribution charge remained at P2.20 per kWh.


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