Meralco rates to remain stable

MANILA, Philippines - Power rates at the Manila Electric Co.’s franchise area are expected to remain stable next month.

Meralco head for utility economics Ivanna dela Peña said that generation charges have been at their lowest levels in the past months.

“The lowest ever recorded was in November 2004. The generation charge level is really very low right now,” Dela Peña said. “Hopefully, we can just maintain it. I think we have reached the base,” she added.

Dela Peña said they would also continue to monitor the prices at the Wholesale Electricity Spot Market (WESM).

De la Peña said that lower generation charges are doing good for the company as this normally propels higher consumption.

Meralco has pending application to increase its distribution charge by an average of 27 centavos per kilowatthour (kwh) under the performance-based rate (PBR) mechanism.

The proposed rate hike adjustments came after Meralco carried out a series of reductions in generation charge for the past four months.

The reduction for the month of August was brought about by the lower wet season rates of state-owned National Power Corp., the higher dispatch of Meralco’s contracted third party private power producers and stable prices at the WESM. It would be noted that fluctuations in the suppliers’ cost of producing electricity, such as fuel and foreign currency exchange costs, is accounted for in the generation charge component of consumers’ electricity bills.

This generation charge is a pass-through cost Meralco collects from its customers in behalf of the suppliers and as such is revenue neutral to the company.