Manila Electric Co., the biggest retailer of electricity, expects lower power rates this month as a result of the annual reconciliation of outage allowances of generators, an official said over the weekend.
Meralco assistant vice president Joe Zaldarriaga said the company would release the final power rate figures this week, adding initial indication points to the possibility of lower electricity charges.
“Right now, we expect the movement of January power rates to be downward, resulting in lower power rates for the month,” Zaldarriaga said.
Citing historical data every January, Zaldarriaga said lower power supply agreement charges were typically brought about by a reduction in capacity fees as a result of the annual reconciliation of outage allowances done at the end of each year under the PSAs approved by the Energy Regulatory Commission.
He said in January last year, the early completion of the annual capacity payment for the Sual Unit 1, Ilijan, Pagbilao Unit 1 and Panay Energy Development Corp. power plants resulted in savings that were immediately passed on to consumers by way of lower electricity rates.
“We are hopeful a similar situation will occur once again this January 2020, as with previous years,” Zaldarriaga said.
Meralco’s power rates in December rose P0.3044 per kilowatt-hour, translating into a P61 adjustment in the typical household’s monthly bill.
The overall rate for a typical household consuming 200 kilowatt-hours increased to P9.8623 per kWh in December from P9.5579 per kWh in November because of higher generation charges.
Generation charges increased to P5.1967 per kWh in December, up by P0.1650 per kWh from P5.0317 per kWh in November, due to higher rates from the Wholesale Electricity Spot Market, which rose P1.0799 per kWh on tighter supply conditions in the Luzon grid.
Meralco secures 10 percent of its power requirements from the WESM, the country’s trading floor of electricity, during the November supply month.
The cost of power from Meralco’s independent power producers and supply agreements in December also increased by P0.1106 per kWh and P0.0987 per kWh, respectively, because of lower average dispatch and the weakening of the peso against the US dollar.
Meralco obtains 38 percent and 52 percent of its requirements from IPPs and PSAs, respectively.
Meralco, meanwhile, will bid out again 1,200 megawatts of power requirement on Feb. 17, 2020 in compliance with the competitive selection process of the Department of Energy.
Meralco, in a new invitation to bid late last year, called on interested parties to participate in the competitive bidding for the supply of 1,200 MW of baseload capacity for 20 years starting 2024.
The company held the first bidding for the 20-year 1,200-MW baseload requirement on Sept. 10, but declared a failure after only one company submitted an offer.