High power rates just got higher this month

by Lenie Lectura – December 10, 2015

from Business Mirror

The high power rates perennially blamed for the country’s poor competitiveness ranking just got higher, after the P0.046-per-kilowatt-hour (kWh) increase in generation charge resulted in P0.55-per-kWh hike in electricity bill in December, the Manila Electric Co. (Meralco) said on Wednesday.

The P0.55-per-kWh hike for residential customers is equivalent to an increase of P11 for a typical household consuming 200 kWh.

The increase in overall rates was primarily due to higher generation charge, which stood at P4.130 per kWh, or P0.046 per kWh higher than last month’s rate.

Generation charge is the largest component of an electric bill. Payment for the generation charge goes to the power suppliers.

Charges from the Wholesale Electricity Spot Market (WESM) went up by P0.535 per kWh. This was mainly due to the lower generation from hydro plants. There was also a higher extent of forced outages in November compared to October.

Plants under the power-supply agreements (PSAs) also registered a slight increase of P0.009 per kWh, primarily due to lower dispatch of SEM Calaca and the increase in fuel cost of Ilijan driven by the weakening of the peso against the dollar.

The average rate of the plants under the independent power producers (IPPs), meanwhile, decreased by P0.005 per kWh. This was driven by the higher dispatch of Santa Rita, after no outages were observed in November. It will be recalled that the plant’s Module 30 had a five-day scheduled outage, together with a less than one day forced outage of its Module 40, in October.

The share of PSAs, IPPs and WESM to Meralco’s total power requirements stood at 49.9 percent, 44.4 percent and 5.7 percent, respectively.

In addition to the generation charge, transmission charge registered an increase of P0.007 per kWh due to the higher ancillary service charges.

Payment for the transmission charge goes to the National Grid Corporation of the Philippines.

There was also a combined increase of P0.002 per kWh in taxes and other charges, such as system loss and subsidies, following the increases in the generation and transmission charges.

Meralco’s distribution, supply and metering charges remain unchanged after registering a reduction in July.

Meralco reiterated that it does not earn from the pass-through charges, such as the generation and transmission charges.