Meralco cuts generation charge

MANILA, Philippines - Customers of power utility giant Manila Electric Co. (Meralco) will enjoy a 2.57-centavo per kilowatt-hour (kWh) reduction in generation charge this December, a ranking company official announced yesterday.

From P4.2286/kWh in November, it will go down to P4.2029 per kWh this month.

“Amidst rising prices of goods and commodities, the generation charge has generally been on the decline over the past months. If we would compare the generation charge now from that of last April, there has been a cumulative 81.76 centavos per kWh reduction,” Meralco vice president and utility economics head Ivanna de la Peña said.

De la Peña attributed the drop in rates to the improvement in the dispatch of the company’s independent power producers (IPPs).

“The decrease in the generation charge was mainly due to the higher dispatch and lower fuel cost of the IPPs in November,” she said.

Meralco sources a portion of its power requirement from its IPPs, San Lorenzo and Sta. Rita natural gas-fired power plants being run by Lopez-owned First Gas Corp.

De la Peña said power obtained from the IPPs registered a decline of 48 centavos per kWh.

She said this more than offset the average 44 centavos per kWh increase in cost of power sourced from National Power Corp. (Napocor) and the Wholesale Electric Spot Market (WESM).

The dispatch of the IPPs increased from 76 percent in October to 85 percent in November.

Following full consumption of contracted quantities of natural gas this year, the First Gas plants started to burn lower-priced banked gas. Banked gas supplied 14 percent of the combined consumption of the natural gas plants in November.

WESM billing adjustments, on the other hand, mainly accounted for the average 44 centavos per kWh increase in the combined purchases from Napocor and the WESM.

Earlier, there were reports of a 1.71-centavo per kWh increase in Meralco charges following recent rulings of the ERC allowing Meralco to collect under-recoveries in lifeline and inter-class subsidies incurred since June 2003.

“With the 2.6 centavos reduction in the generation charge and adjustments in the other rate components, our customers will in fact see a net reduction in their bills this December,” De la Peña said.

Meralco customers consuming 100 kWh will see their bills go down by P3.84, those consuming 200 kWh will experience a P7.82 decline, while for those using 300 kWh, the reduction is at P11.74.

Meralco external communications manager Joe Zaldarriaga assured their customers of the company’s efforts to look for ways to lower power rates.

“Meralco consistently looks for the supply mix that would yield the most reasonable rates to customers,” Zaldarriaga said, pointing out that the company does not earn from the generation charge.