Power charges likely lower in May — Meralco

by Alena Mae S. Flores – May 05, 2016 at 11:50 pm

from Manila Standard Today

Electricity rates may go down this month, on lower generation charges, power retailer Manila Electric Co. said Thursday.

“There are strong indications that we could see a generation charge reduction this May,” Meralco senior vice president Lawrence Fernandez said.

Fernandez said the cost of power produced by the natural gas plants of Ilijan, Sta Rita and San Lorenzo with a combined capacity of 2,700 megawatts “all registered reductions, largely because of the downward repricing of Malampaya natural gas.”

“These three [natural gas] suppliers account for almost half of Meralco’s requirements,” Fernandez said.

“For the coal-fired suppliers, we saw reductions in Calaca and Masinloc, which both offset higher charges from Pagbilao,” Fernandez said.

The 735-megawatt Pagbilao coal plant was undergoing scheduled maintenance for much of the April supply month, resulting in reduced dispatch level.

Fernandez said he was hoping that “there are no other adjustment that would reverse the direction” of electricity prices for May.

“We’re still waiting for other billings,” he said.

Meralco’s power rates went up by P0.22 per kilowatt-hour in April due to the higher generation charges and the implementation of the feed-in tariff allowance.

“Main drivers for this increase in the rate are the higher generation charge and the imposition of an additional P0.08 per kWh on the feed-in tariff allowance,” Meralco said earlier.

Meralco said the higher power demand amid the hot weather also resulted in higher charges from the wholesale electricity spot market, the country’s trading floor of electricity .

“The increase in the rates was primarily due to the generation charge, which increased by P0.10 per kWh from last month.  At P4.10 per kWh, it is P1.31 per kWh lower compared to April 2015’s P5.41 per kWh,” Meralco said.

The company attributed the increase in the generation charge in April to the higher charges from the WESM, which went up by P2.23 per kWh.

Peak demand in the Luzon grid increased by more than 500 MW from the February to the March supply months with the approach of summer.

Meralco said costs of energy sourced from the power supply agreements and independent power producers registered slight reductions of P0.02 and P0.01 per kWh, respectively.

“These reductions in the PSA and IPP charges were mainly due to the higher dispatch of a number of plants under them, along with the appreciation of the peso in March,” Meralco said.

Meralco sourced bulk of its power requirements from PSAs accounting for 49.2 percent, followed by IPPs at 45.6 percent. Meralco sourced 5.1 percent of its power requirements from WESM in March.