Meralco releases computation for July power bill

by Lenie Lectura, 14 July 2015
from BusinessMirror

THE Manila Electric Co. (Meralco) released on Tuesday the final computation of power rates for July, following last week’s order from the regulators to lower distribution rates.

For this month, overall power bills will be reduced by only P0.2 per kilowatt-hour (kWh) for consumers with a monthly consumption of 200 kWh.

A Meralco bill is mainly composed of generation, distribution, transmission and other charges.

Generation charge, the largest component of a Meralco bill, went up by P0.28 per kWh to P4.73 per kWh in July. But distribution rates declined by P0.25; transmission charge by P0.05; taxes down by P0.02; while other charges increased by P 0.02 per kWh.

Meralco was slightly delayed in sending out the bills for this month because it had to wait for the Energy Regulatory Commission’s (ERC) ruling on an application for lower distribution charge filed by Meralco last month.

With the issuance of the ERC order last week, Meralco said it will reflect the lower distribution charge, by 11.26 percent, in the bills of customers starting this July.

Based on the ERC order, Meralco said reduction in the bills of residential customers with varying monthly consumption are as follows: 200 kWh—P4.50; 300 kWh—P19.14; 400 kWh—P41.83, and; 500 kWh —P88.89. At P9.387 per kWh for a 200-kWh consumer, this month’s overall rate is P1.24 per kWh lower compared to rates in July last year.

Net impact may vary, though, for other customer categories. However, any reduction in distribution charge was offset by a higher generation charge.

The higher generation charge was mainly driven by higher prices at the Wholesale Electricity Spot Market (WESM) for the June supply month, which registered an increase of P5.05 per kWh. Numerous instances of forced outages by various power plants also triggered a number of yellow alerts, affecting three days for the June supply month, thereby putting more upward pressure on WESM prices. Despite the elevated market prices, the secondary price cap was not triggered.

The Malampaya gas restrictions during said supply month also resulted in the use of more expensive alternative fuel by the First Gas plants. As a result, cost of power from plants under the independent power producers (IPPs) increased by P0.07 per kWh. Power supply agreements (PSAs), meanwhile, registered a reduction of P0.09 per kWh due to higher dispatch of the plants.

The share of PSAs, IPPs and WESM to Meralco’s total power requirements stood at 48.3 percent, 44.2 and 7.5 percent, respectively.

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

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