Meralco expects no power rate increase in June

by Alena Mae S. Flores – June 02, 2016 at 11:35 pm

from Manila Standard Today

Manila Electric Co. said Thursday power generation charges will not likely increase in June, given the stable prices at the Wholesale Electricity Spot Market.

Meralco spokesman and assistant vice president Joe Zaldarriaga said lower natural gas prices would also have an impact on generation cost this month.

“Generation charge for June is expected to be flat. Factors likely to drive the final figure are the lower average WESM price and indications of lower natural gas price for the May supply month,” he said.

WESM acts as the country’s trading floor of electricity.

Major natural gas plants including Sta. Rita and San Lorenzo power plants of First Gas and Ilijan of South Premiere in Batangas province supply power to Meralco.

Natural gas prices from the Malampaya gas fields are adjusted quarterly and are indexed to world crude oil prices.

The three natural gas plants supply more than half, or 54 percent percent of Meralco’s requirements.

Zaldarriaga said the higher availability of power plants would also help reduce generation charges.

“A number of large power plants likewise registered higher dispatch. We will need to however wait for the actual bills from our suppliers,” he said.

Meralco also sources its power requirements from power supply agreements or PSAs and independent power producers.

Meralco’s residential power rates went down by P0.41 per kilowatt-hour in May, following the downward movement in all power rate components,

The rate of residential consumers went down to P8.444 per kWh as the cost of generation, transmission, taxes and other charges also eased. Meralco attributed the decrease in the overall rate to lower generation charge.

The generation charge decreased by P0.21 per kWh in May to P3.88 per kWh from a month ago.  It was also P0.93 per kWh lower compared to May 2015’s P4.81 per kWh. May’s generation charge is the lowest since October 2004.

Charges from IPPs decreased by P0.19 per kWh, led by lower rates at First Gas plants.

Meanwhile, plants under the power supply agreements registered a reduction of P0.25 per kWh, driven by the higher dispatch of Calaca coal-fired power plant.

The Masinloc coal plant also registered lower rates due to lower instances of outages.