Meralco customers may enjoy lower bills in January

MANILA, Philippines - Customers of Manila Electric Co. (Meralco) may enjoy lower electricity bills next month, a ranking company official said.

Ivanna de la Peña, Meralco first vice president, said that the utility’s rates may go down in January.

Last month, Meralco cut its rates by 32 centavos per kwh bringing down its December rate to P4.97 per kwh from the previous month’s P5.29 per kwh.

Meralco attributed the drop in electric bills to lower prices of electricity in the wholesale electricity spot market (WESM) which went down by P4.99 per kwh this month.

WESM prices for the supply month of November was at P6.35 compared to P11.34 of the preceding supply month.

The reduction in WESM prices more than offset the slightly higher prices from other suppliers. National Power Corp. (Napocor) rates increased by 44 centavos from P4.85 to P5.29 per kwh.

Meanwhile, average independent power producer (IPP) rates also increased by 14 centavos from P4.23 to P4.37 per kwh, due to the weakening of the peso-dollar exchange rate and lower dispatch.

In particular, one unit of San Lorenzo was on scheduled plant maintenance from Oct. 16 to Nov. 17.

Lower dispatch from San Lorenzo is still expected next month as another unit is on maintenance starting Nov. 24 up to Dec. 19, 2010.

In percentage terms, Meralco obtained 14 percent, 41 percent and 45 percent from WESM, Napocor, and IPPs, respectively, for the supply month of November. The IPPs continue to be Meralco’s cheapest source of power.

Meralco reiterated that the generation charge is entirely a pass through charge and does not accrue or go to Meralco.

The cost of power sold by the generating companies can move from month to month based on many factors beyond its control like fuel prices, the dispatch of the IPPs, the foreign exchange rate, and WESM prices, among others.

Meralco said should there be adjustments in the cost of generation from its various suppliers, it will reflect these changes in the customers’ bills, such as this month’s reduction.

The generation charge, which is the electricity bill’s biggest component, averages about 60 percent of the customer’s average monthly power bill.

This charge goes directly to Meralco’s power suppliers and not to Meralco.