April rate hike awaits Meralco customers

MANILA, Philippines – Power rates are up by P0.27 ($0.006) per kilowatt hour (kWh) in April due to the ongoing maintenance shutdown of the Malampaya deepwater gas-to-power facility.

This means that a household consuming 200 kWh can expect its overall electricity rate to hit P10.68 ($0.24) this month.

The Manila Electric Company (Meralco) said Wednesday, April 8  that the upward adjustment was mainly due to a P0.20 ($0.004) per kWh adjustment in the generation charge, which increased to P5.41 ($0.12) from P5.21 ($0.12) per kWh.

The generation charge is the portion of the bill that goes to the power plants that produce electricity.

April’s generation charge of P5.41 ($0.12) per kWh was lower than in similar months that were also affected by a Malampaya shutdown.  In March 2010, November 2011, and August 2012, the generation charge reached P5.84 ($0.13), P5.79 ($0.13), and P6.74 ($0.15) per kWh, respectively.

Meralco also earlier warned that the generation charge in May could also go up, due to the longer impact of the Malampaya maintenance schedule (from March 26 to April 13) on the April supply month, and the expected higher temperature in the coming days.

Given this, customers are highly encouraged to adopt energy efficiency measures. (READ: Meralco rates to spike in April and May)

Why the rate hike?

Why the spike? This is because the 3 natural gas power plants fueled by Malampaya – Sta Rita, San Lorenzo, and Ilijan – will have to shift to liquid fuel and diesel, which are more expensive than natural gas.

In addition to the generation charge, taxes and other charges also registered increases of P0.05 ($0.001) per kWh and P0.03 ($0.0007) per kWh, respectively.

As a result, rates of the Independent Power Producers (IPPs) and Power Supply Agreements (PSAs) increased. Rates of the IPPs went up by P0.17 ($0.004) per kWh, partly tempered by the return of Quezon Power Plant from a maintenance shutdown.  Rates from PSAs went up by P0.31 ($0.007) per kWh.

But these were mitigated by a decrease in the transmission charge, which registered P0.01 ($0.0002) per kWh.

The reduction also of P1.55 ($0.035) per kWh in charges from the Wholesale Electricity Spot Market (WESM) cushioned the increase, as the power supply situation remained normal since there were less forced outages of power plants during the March supply month.

Meralco’s distribution charge also has not registered any adjustment and has remained at the same level since July 2014.

Meralco again stressed that it does not earn from the pass-through charges, such as the generation and transmission charges. – Rappler.com

$1 = P44.50