Customers of Manila Electric Company (Meralco) will need to shell out higher budget for their electric bills this month as the utility firm’s residential rate had gone up by P0.3256 per kilowatt hour (kWh) to P9.4630 per kWh from P9.1374 per kWh.

According to Meralco, for residential consumers in the 200-kilowatt hour usage band, this will redound to P65.12 aggregate increase in their bills.

The utility firm emphasized that the uptick in tariff this month had been mainly due to hike in generation charge, and that was chiefly triggered by the change of fuel utilization by the gas plants because of the 23-day shutdown of the Malampaya gas production facility from October 2-25 this year.

In the last supply month, the generation charge which accounts for the chunk of the rate pass-on to consumers, had climbed by P0.2911 per kWh to P5.3346 from the month-ago level of P5.0435 per kWh.

“The shutdown (of the Malampaya gas production platform) resulted in higher costs of power from the Wholesale Electricity Spot Market (WESM) and independent power producers (IPPs),” Meralco explained.

The total increase in generation charge, courtesy of the Malampaya facility downtime, should have been P0.81 per kWh, but Meralco opted to reflect that in the bills on staggered basis so it will not unduly burden consumers especially in the run up to Christmas holiday shopping.

“This month’s generation charge increase would have been significantly higher, but Meralco took the initiative to cushion the impact in the bills of its customers,” Meralco stressed, with it specifying that it “coordinated with some of its suppliers to defer collection of their generation costs.”

Meralco thus noted that “these deferred charges will subsequently be billed on a staggered basis over the next four months as directed by the Energy Regulatory Commission.”

For the other cost components in the overall pass-on tariff, the transmission charge went down by P0.0403 per kWh in this billing cycle due to lower purchase costs of ancillary services; while taxes, system loss and other charges increased by P0.0748 per kWh. The collection of universal charge-environmental charge (UC-EC) at P0.0025 per kWh is still suspended as mandated by the industry regulator.

The utility firm conveyed that when the gas production platform was on shutdown, available capacity in the WESM had been trimmed, hence, there were tight supply conditions – including ‘yellow alert’ incidents or insufficiency of power reserves – in the country’s main power grid.

“The Luzon grid was also put on yellow alert on October 20 due to forced outages of several power plants. As a result, WESM charges went up by P1.7073 per kWh,” Meralco narrated.

On its supply procurement, the power firm logged P0.8186 per kWh increase on billings of its contracted IPPs; while charges from Meralco’s power supply agreements (PSA) had been lower by P0.2841 per kWh.

The hike in IPP costs, Meralco added, had been primarily due to the shift to more expensive liquid fuels of the Santa Rita and San Lorenzo gas plants during Malampaya’s downtime, and that was a necessary step “to avoid rotating power interruptions.”

The fraction of supply sourced by Meralco from IPPs last month had been at 37.4-percent; while the PSA capacities accounted for the lion’s share of 48.7-percent. Procurement from the spot market, on the other hand, stood at 13.9-percent.

Source: Manila Bulletin (