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MANILA, Philippines – Finally, charges sought by Manila Electric Company (Meralco) for the months of December and January are going down.
On Tuesday, March 18, the operator of the Wholesale Electricity Spot Market (WESM), which was blamed for the spike in Meralco charges, slashed electricity prices for the November and December supply months by over 70%.
For the period October 26-November 25, the WESM average price was cut to P6.007 per kilowatt-hour (kWh) from P25.403/kWh.
For the period November 26-December 25, the WESM average price was cut to P6.245/kWh from P28.367/kWh.
“PEMC (Philippine Electricity Market Corporation) will issue the WESM bills today using the regulated prices,” said PEMC in a statement sent to media.
Higher prices charged by WESM were largely the reason behind the combined P9.48/kWh hike in Meralco’s December and January charges. (READ Rappler’s special report: What Meralco’s rate hike tells us about the power sector)
Meralco was forced to source more power from WESM in November and December due to the simultaneous outages of some of its power plant suppliers. The outages coincided with the maintenance shutdown of the Malampaya natural gas facility.
WESM prices during those months soared to record levels. Regulators later on ruled that the spike was due to widespread withholding of capacity by power generation companies – a breach of WESM’s must-offer rule.
Given this, the Energy Regulatory Commission (ERC) decided to void WESM prices, ordering PEMC to impose regulated prices. It noted WESM prices “could not qualify as reasonable, rational and competitive” and that the tightness in supply was “contrived.”
Actual WESM bills would depend on buyers’ exposure to the spot market.
For Meralco, PEMC said the Nov 26-Dec 25 WESM charge would go down to P7.219/kWh from P37.507/kWh.
Energy Secretary Carlos Jericho Petilla said on the sidelines of the 2014 Philippine Economic Briefing Tuesday that “Meralco will come up with its own computation and apply this with ERC.”
Meralco spokesperson Joe Zaldarriaga said, “we have yet to receive an invoice from PEMC. It will take a day or two for Meralco to recompute. We will wait for guidance from the ERC.” – Rappler.com
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