Power retailer Manila Electric Co. (Meralco) forecasts a possible increase in its July generation charge, which could lead to higher overall power rates.
This is attributed to a weaker peso and higher transmission charges from the reserve market.
“While we have yet to receive all the final billings from our suppliers, indications point to a possibility of an increase in the generation charge this month,” Meralco spokesman Joe Zaldarriaga said.
“This may be mainly due to the peso depreciation which will affect dollar-denominated costs of our suppliers,” he said.
Zaldarriaga expressed hope the anticipated increase might be mitigated by lower charges from the Wholesale Electricity Spot Market (WESM).
Average system-wide WESM charges declined by 3.9 percent, or P0.16 per kilowatt-hour (kWh), in June to P3.86 from P4.01, owing to stable supply margins.
“However, we also see possibility of higher transmission charge due to the pressure in reserve market prices for the June supply month compared with the previous month,” Zaldarriaga said.
Meralco in June announced a power rate reduction of P0.1076 per kWh, bringing the overall rate for a typical household down to P12.1552 from P12.2628 in May.
The reduction was driven by a lower generation charge on decreased costs from its suppliers.
The generation charge last month dropped P0.1099 per kWh to P7.3552. This was due to lower charges from power supply agreements (PSAs), independent power producers (IPPs) and the WESM.
