Manila Electric Co., the biggest retailer of electricity, expects rates to rise this month due to an amortized charge of P0.13 per kilowatt-hour, high coal prices and lower delivery from the Malampaya natural gas field.
Meralco vice president and head of utility economics Lawrence Fernandez said has not received the final billings from suppliers, but an increase is expected in the December generation charge.
“As we may recall, a portion of November generation costs was deferred, to be amortized over four months, so that the November generation rate was around P0.52 per kWh lower than what it would have been,” Fernandez said.
He said the December bill would include one-fourth of the deferred generation costs, or around P0.13 per kWh, as directed by the Energy Regulatory Commission.
“Also, the prevailing high coal prices in the world market and the continued use of more expensive alternative fuel with the persisting Malampaya gas supply restriction are expected to raise the fuel costs for this billing period,” Fernandez said.
The output of the Malampaya gas project in northwest Palawan has been declining, resulting in fuel delivery restrictions to the natural gas power plants that supply Meralco.
With the gas restriction, some natural gas plants are forced to run on the more expensive liquid fuel.
Meralco’s charges in November increased P0.3256 per kWh as the overall rate for a typical household rose to P9.4630 per kWh from P9.1374 per kWh in October due to higher generation charge.
The November generation charge went up P0.2911 per kWh to P5.3346 per kWh from P5.0435 per kWh the previous month as a result of the Malampaya shutdown.
Fernandez earlier said the November generation charge would have been significantly higher but Meralco took the initiative to cushion the impact in the bills of customers.
Meralco coordinated with some of its suppliers to defer collection of a portions of their generation cost. These deferred charges will be subsequently on a staggered basis over the next four months.
“The generation charge would have been P0.81 or around P0.52 higher without the efforts that Meralco took deferring some of this costs with our suppliers,” Fernandez said.
He said P0.52 per kWh had been deferred and would be amortized in the bills in the next four months until March 2022.
The Malampaya shutdown resulted in higher costs of power from the Wholesale Electricity Spot Market and Independent Power Producers.
The Malampaya naturas gas facility in northwest Palawan went on maintenance shutdown from October 2 to 25, resulting in lower supply in the WESM, the trading floor of electricity.