Power rates are expected to go down in January because of lower generation cost in the previous month, an official of distributor Manila Electric Co. said Thursday.
“There is a strong possibility that we will see a gen charge reduction this January,” Meralco senior vice president and head of utility economics Lawrence Fernandez said.
Fernandez said prices at the Wholesale Electricity Spot Market and the foreign exchange were relatively stable during the December supply month.
“We expect reductions in charges from PSAs [power supply agreements] due to the annual reconciliation of outage allowances as provided for in the ERC [Energy Regulatory Commission] approved contracts,” he said.
Meralco announced in December a slight increase in power rates of P0.1011 per kilowatt-hour, bringing the household rate to P8.36 per kWh.
Meralco attributed the increase last month to the upward movement in the generation charge.
Meralco’s generation charge went up to P3.9351 in December from P3.8436 per kWh in November, on the significant depreciation of the peso against the US dollar.
The peso depreciated to 49.73 a dollar in November from 48.405 a dollar in October. The cost of power from independent power producers, whose billings were around 96 percent dollar-denominated, increased by P0.2615 per kWh in December. Meralco sourced 36.4 percent of power from its IPPs in November.
Cost of power sourced from plants under Meralco’s PSAs also increased by P0.2214 per kWh mainly due to higher fuel cost and the weakening of the peso against US dollar.
PSA billings were also affected by peso depreciation as around two-thirds of their costs were dollar-denominated. Meralco sourced 40.8 percent of its power requirements from PSAs.