Meralco bares slight increase in September power rates due to higher generation cost

Consumers of Manila Electric Co. will pay slightly higher electricity rates this month on the back of higher generation cost.

The electricity retailer said the average household rates would increase by P0.1055 per kilowatt-hour to P9.1091 per kWh this month from P9.0036 per kWh in August.

Meralco vice president and spokesperson Joe Zaldarriaga said the adjustment would be equivalent to an increase of around P21 in the monthly bill of a typical residential customer consuming 200 kWh.

The company said the higher generation charge was due to the net settlement surplus corrections at the Wholesale Electricity Spot Market, which serves as the trading floor of electricity, and increased costs from power supply agreements and independent power producers.

The generation charge, which makes up about 55 percent of customers’ electricity bills, rose P0.1117 per kWh to P5.0439 from P4.9322 per kWh in August.

Meanwhile, Meralco head of utility economics Lawrence Fernandez said the ongoing restriction from the Malampaya gas project in northwest Palawan already affected the ability of the natural gas power plants to deliver power.

“We are already seeing today, as part of the generation charge for the past few months, since there is already restriction or reduction of supply from the Malampaya platform. Since March, it has not supplied the full requirements of the natural gas plants in the Luzon grid. Around 400 MW to 500 MW of capacity have been running on liquid fuel for the several months now and this has led to an adjustment in the generation charge in the past few months,” Fernandez said.

He said the pattern would continue next month when Malampaya goes on scheduled maintenance shutdown from Oct. 2 to 22. Its impact will be reflected in the generation charge of consumers in November.

Meanwhile, charges from Meralco’s PSAs registered an increase of P0.2494 per kWh for September.

Meralco said the reduction in demand brought about by the re-imposition of enhanced community quarantine in Metro Manila and neighboring regions led to lower excess energy deliveries, which were priced at a discount, from South Premiere Power, San Miguel Energy and AC Energy.

PSAs remained Meralco’s lowest cost source of supply. Meralco sourced 53.2 percent of its supply requirements from PSAs in August.

IPP charges of Meralco also increased by P0.0955 per kWh on lower average plant dispatch with the forced outage of Quezon Power Philippines Ltd. (460 MW) from Aug. 18 to 22 and scheduled outage of San Lorenzo Module 50 natural gas power plant (265 MW) starting Aug. 16.

Meralco said fuel costs of Sta. Rita and San Lorenzo, which is around 60 percent of the total cost, increased due to the use of more expensive alternative liquid fuel for their continued operation, following the ongoing restriction of gas supply from Malampaya.

The cost of using liquid fuel is about twice that of using Malampaya gas.

Meralco sourced 36.8 percent of its power requirements from the IPPs during the August supply month.