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September power rates surge 10% after refund

Power rates surged by more than 10 percent in September, on higher generation cost and following the completion of the P6.9-billion refund, retailer Manila Electric Co. said Thursday.

Meralco said power rates for residential households increased P0.8642 per kilowatt-hour to P9.2491 per kWh in September from P8.3849 per kWh in August. This translates into an additional P173 in the monthly bill of a household consuming 200 kWh.

“Rates this September returned to pre-refund levels after completion of the refund of over-recovery on pass-through charges from January 2014 to December 2016, totaling around P6.9 billion,” the utility company said.

Meralco’s petition for refund with prayer for provisional authority was granted by the Energy Regulatory Commission on May 11, 2017 and was implemented in June to August.

Meralco said the refund was not shown as a separate line item in the bill but was reflected as reductions in the different pass-through charges of the bill, which include generation, transmission and system loss charges and lifeline and senior citizen subsidies in the past three months.

The refund translated into a monthly reduction of P0.88 per kWh, including taxes for residential customers. Residential households consuming 200 kWh enjoyed a total bill reduction of almost P530 over the three-month period.

Meralco said overall generation charge also increased 0.5615 per kWh in September to P4.5378 per kWh from P3.9763 per kWh in August. 

The August generation charge incorporated a reduction of P0.5355 per kWh, representing the refund approved by the ERC.

Meralco said power purchased from the Wholesale Electricity Spot Market, the country’s trading floor of electricity, increased P1.7263 per kWh, on higher power demand in the Luzon grid.

Cost of power from Meralco’s power supply agreements or PSAs also registered a slight increase of P0.0263 per kWh because of the peso depreciation and lower plant dispatch.

Meralco sourced 12 percent of its power requirements from WESM and 42 percent from PSAs during the August supply period.

Power sourced from Meralco’s independent power producers declined P0.1117 per kWh on improved dispatch of First Gas-Sta. Rita natural gas plants, after undergoing scheduled maintenance in the preceding month. Meralco sourced 46 percent of its requirements from the IPPs.

Meralco said transmission charges of residential customers decreased P0.0510 per kWh, while taxes and other charges also went up P0.3537 per kWh.

Meralco’s distribution, supply and metering charges were remained unchanged for 26 months, after they registered reduction in July 2015. 

Meralco said it was not earning from the pass-through charges, such as the generation and transmission charges. Payment for the generation charge goes to the power suppliers, while transmission charge goes to grid operator National Grid Corp. of the Philippines.

The Philippines’ power rates are still among the highest in Southeast Asia, but are at par with Singapore, the Energy Department said in the newly released Power Development Plan for 2016 to 2040.

Data from the Energy Department’s PDP showed the Philippines’ and Singapore’s power rates were at the same level at P5.84 per kilowatt-hour for industries.

The Philippines, however, has a higher rate for commercial customers at P7.49 per kWh, compared with Singapore’s P7.29 per kWh.  Household or domestic rates in the Philippines were at P8.90 per kWh, higher than Singapore’s P7.27 per kWh.

“Philippine power rates across the three sectors are among the highest in Asean but at par with the level of Singapore. A major reason for these higher prices is the absence of government subsidies,” the report said.

“In addition, taxes, fees, and other charges are also levied on the power industry sectors composed on the generation, transmission and distribution levels which constitute a portion on electricity rates in the Philippines,” it said.

Topics: Power rates , Manila Electric Co.
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