Industry source: Meralco generation charge for March may amount to P4.90 per kWh

By Lenie Lectura – March 8, 2017

from Business Mirror

Generation charge of the Manila Electric Co. (Meralco) for this month could amount to P4.90 per kilowatt-hour (kWh), higher than the previous month’s P4.32-per-kWh generation charge.

The amount already includes the P0.22-per-kWh adjustment in fuel cost brought about by the shift in liquid fuel by the power plants during the 20-day shutdown of the Malampaya natural-gas facility. The remaining P0.58 per kWh, meanwhile, is the actual increase in generation charge for the February supply month.

Meralco has yet to announce official figures for March power bills, but the P4.90-per-kWh generation charge was revealed on Wednesday by an industry source. The Department of Energy (DOE) and Meralco are set to jointly announce the March electricity rates on Thursday.

Meralco had sought the recovery of P2.4 billion for sourcing its power requirements from other power suppliers whose generators are fueled by liquid gas during the Malampaya shutdown.

The Energy Regulatory Commission (ERC), however, approved only P1.752 billion.

“The ERC’s computation reflected a lower total fuel cost in the amount of P1.752 billion compared to Meralco’s proposal of P2.417 billion, or a difference of some P665 million,” the ERC said.

The amount was lower as the ERC’s calculation made use of the previous month’s actual fuel cost, while Meralco’s computations were based on forecasted fuel cost.

The approved P1.752 billion will be collected from consumers through an upward adjustment in the generation charge in the amount of P0.2211 per kWh for three months on a staggered basis from March to May 2017 billings.

Meralco filed on January 31 an application for the approval of the staggered recovery and payment of the differential generation charge for the February 2017 supply month, with prayer for provisional authority in view of the Malampaya shutdown from January 28 to February 16, which affected the supply of natural gas to the power plants of Ilijan, Santa Rita, San Lorenzo, San Gabriel and Avion.

These plants supply an aggregate capacity of 3,211 megawatts (MW) to the Luzon grid, of which 2,565 MW is supplied to Meralco’s franchise area.

Overall, Meralco proposed to collect a total of P0.9174 per kWh and to collected the amount in three tranches starting with P0.30 per kWh in March electricity bills, another P0.30 per kWh in April, and the balance to be reflected in May power bills.

The said Malampaya shutdown coincided with the scheduled maintenance of the other power plants, such as SEM-Calaca Power Corp. Unit 1 and Quezon Power (Philippines) Ltd., which collectively contributes some 585 MW of Meralco’s power requirements. Essentially, Meralco had to source its power requirements from other power suppliers that use liquid fuel, which is more costly than natural gas.