Power rates seen stable in October

by Alena Mae S. Flores – October 05, 2016 at 11:30 pm

from Manila Standard Today

Power distributor Manila Electric Co. said it expects generation charges to remain stable this month despite the impact of peso depreciation and higher coal prices.

“We are seeing a strong possibility that lower charges from the WESM [wholesale electricity spot market] may be able to offset the upward pressure of the peso depreciation and higher coal prices,” Meralco senior vice president and head of utility economics Lawrence Fernandez said.

Meralco’s  generation charge was at P3.94 per kilowatt-hour in September, slightly higher than P3.85 per kWh in August.

“[Generation charge is] flattish with a possibility of slight reduction,” Fernandez said.

He said the estimate excluded transmission and other charges which would also have an impact on the overall rates.

Meralco releases its generation charges usually in the first week of the month.

Fernandez earlier said Meralco was waiting for the billing of its suppliers “to see if they will already compute the forex effect and the more updated coal prices in their bills to us.”

“We’re now at record lows,  I think the pressure is to keep it where it is, but there are already pressures for a slight increase in generation cost,” he said.

Meralco consumers experienced slightly lower power rates in September as the residential rate for a typical household went down by P0.0451 per kWh.

Residential rates went down to P8.46 per kWh in September, which translated into a reduction of around P9 in the electricity bill of a household with a monthly consumption of 200 kWh.

Meralco said the reduction was due to the downward movement in the transmission charge, which more than offset a higher generation charge.

Meralco’s rates went down despite the series of yellow and red alerts experienced in late July to early August.

Luzon plunged to a series of yellow and red alerts on July 26 to Aug. 5 on thin power reserves as many power plants were on maintenance shutdown while others suffered technical problems forcing them to undergo forced outage.

Cost of power from independent power producers increased by P0.17 per kWh due to the reduction in the operating hours of Quezon Power Philippines Ltd., which went on forced outage on Aug. 5 to 8 and First-Gas Sta. Rita, with Modules 10 and 20 which scheduled maintenance on Aug. 13 to 14 and the whole August supply month, respectively. Meralco sourced 35.6 percent of power requirements from the IPPs in August.

Overall charges from WESM decreased by P0.32 per kWh. WESM acts as the country’s trading floor of electricity.

Meralco sourced 20.6 percent of its power requirements from WESM in August, up from 9.5 percent in the previous month.