Weaker peso pushes up electricity rate

by Alena Mae S. Flores – December 07, 2016 at 10:20 pm

from Manila Standard Today

Power rates within the franchise area of Manila Electric Co. increased by P0.1011 per kilowatt-hour in December, on higher generation charges and weaker peso.

Meralco said in a statement this brought the power rate for a typical household to P8.36 per kWh this month, translating into an increase of P20 in the electricity bill of a household with monthly consumption of 200 kWh.

The slight increase followed four straight months of reduction totaling P0.35 per kWh, it said.

“The increase this month is mainly due to the upward movement in the generation charge.  This month’s overall rate is still lower by P0.25 per kWh compared to December 2015’s P8.61 per kWh,” the company said.

Meralco said the generation charge rose P0.0915 per kWh to P3.9351 per kWh this month from P3.8436 per kWh in November.

“The increase resulted mainly from a significant weakening of the peso against the US dollar.  From a level of P46.580/US dollar in August, the peso depreciated to P48.405/US$ in October, and further to P49.73/US dollar in November,” the company said.

Meralco said the peso depreciation affected the cost of power from the independent power producers, whose billings were around 96 percent dollar-denominated, thus increasing by P0.2615 per kWh.

Meralco said generation charges also increased due to lower dispatch with the scheduled maintenance of Sta. Rita Module 30 during the whole supply month of November. Meralco sourced 36.4 percent of its requirements from the IPPs at 36.4 percent.

Cost of power sourced from plants under Meralco’s power supply agreements also increased P0.2214 per kWh mainly because of higher fuel cost and the weakening of the peso against US dollar.

Meralco’s PSA billings was affected by peso depreciation as around two-thirds of their costs are dollar-denominated. Meralco procured 40.8 percent of its power requirements from its PSAs.

The company said overall charges from the Wholesale Electricity Spot Market dropped P0.3734 per kWh, which partly mitigated the higher charges from the IPPs and PSAs.

Meralco said spot prices remained low in November because of lower demand and fewer outages compared to last month. Meralco sourced 22.5 percent Meralco sourced 22.5 percent of its requirements from the WESM in November.

Transmission charges of residential customers, however, went up P0.0031 per kWh, mainly due to the slight increase in the ancillary service charges.

Taxes and other charges also increased by a combined amount of around P0.0065 per kWh.

Meralco, whose customers will reach six million this year, said its distribution, supply, and metering charges remained unchanged for 17 months, after these registered reductions in July 2015.