Higher power rates to prevail until June

MANILA, Philippines – Consumers may have to endure higher electricity rates even after the sizzling summer season, as the Manila Electric Co. (Meralco) completes refunds to subscribers under a refund tack ordered early this year by the Energy Regulatory Commission.

Consumer and Oil Price Watch chairman Raul Concepcion raised the scenario at a press conference yesterday, during which he revealed that the effects of the 16.22 centavos per kilowatt-hour increase in Meralco rates will be felt more after the completion in May of the 16.14 centavos per kWh net settlement surplus refund.

He said the refund, which was first reflected in the February billing, has been absorbing Meralco’s 16.22-centavo rate hike. Net settlement surplus is derived after all market transactions have been accounted for.

“After May, Meralco will start to reflect the P0.1622 per kWh increase which means higher electricity rates for consumers. But before that happens, they should inform the public about it,” Concepcion said.

To ensure transparency, Concepcion said the country’s largest privately-owned power distribution firm should post in its website the cost
of power it buys from independent power producers, National Power Corp. and the wholesale electricity spot market.

He said his group will also request a weekly and monthly “coordination meeting” with the government and with other concerned sectors.

“This will help ease the burden of the consumer by forewarning them of power adjustments by the distribution utilities as soon as generation companies and the National Transmission Co. bill the DUs (direct users),” he said.

Consumers paid Meralco 82.23 centavos per kWh more this month.

The increase was due to a rise in generation and distribution charges of Meralco brought about by the uptick in the wholesale electricity spot market (WESM) prices.

For the period, WESM prices increased by as much as P3 per kWh.

Based on the Philippine Electricity Market Corp., operator of WESM, prices went up to P8.936 per kWh for its Feb. 26-March 25 billing to Meralco. This was higher by P3.304 than the P5.632 per kWh indicated in PEMC’s final billing from Jan. 26-Feb. 25.

The spike in WESM prices was apparently triggered by higher utilization of oil plants.

Another reason for the increase was the higher procurement cost brought about by the shutdown of one of its independent power producers (IPPs), Quezon Power Philippines Ltd., which had a scheduled maintenance during the period.

The 82.23-centavo increase excluded the upward adjustments in system loss and transmission charges.

Based on its actual billing, Meralco increased its rate by 97.53 centavos per kWh this month.

Meralco’s generation charge was jacked up by 51.88 centavos per kWh to P4.9073 from P4.3885 per kWh in March.

Its distribution charge, meanwhile, went up by 30.36 centavos to 87.65 centavos per kWh from last month’s 57.29 centavos per kWh.

The system loss charge increased by 7.70 centavos this month to 80.75 centavos per kWh, from 73.05 centavos per kWh in March.

Transmission charge for this month was higher by 7.59 centavos to 9.92 per kWh from last month’s 9.163 centavos per kWh.

On the other hand, the metering system and supply charges of the power utility firm were kept at the same levels or at 24.35 centavos and 52.71 centavos per kWh, respectively.

Meralco had warned consumers of a possible spike in power demand in the summer months.

Meralco vice president for corporate communication Elpi Cuna earlier said customers should be mindful of their consumption during this period.

“The hot summer months usually raise the consumption levels of our customers,” Cuna said.