There will be paramount reason for Filipino consumers to strive saving on their electricity usage during the Christmas holidays, as power utility giant Manila Electric Company (Meralco) announced that its rates will rise by P0.3143 per kilowatt hour (kWh) in the December billing.

The power firm said the tariff uptick had been triggered by elevated generation charges, which is the biggest component (at more than 50-percent) of the pass-on rate components of distribution utilities.

For those in the 200-kWh consumption bracket, the equivalent increase in the bills of residential end-users will be P63, according to Meralco.

With the newly enforced rate hike, the overall rate of Meralco will already be escalated to P9.7773 per kWh from the month-ago level of P9.4630 per kWh.

The utility firm specified that the generation charge for December climbed by P0.1997 per kWh to P5.5343 per kWh from the previous billing cycle’s P5.3346 per kWh – that is inclusive of the first tranche of the four installments that account for cost recoveries in the higher generation charge caused by the liquid fuel shift of the gas plants during the October maintenance shutdown of the Malampaya gas production facility.

The Energy Regulatory Commission (ERC), in particular, has directed Meralco to reflect the Malampaya-linked cost hikes on a staggered basis, that way, it will not distress consumers if it had otherwise been done on one-time pass on in the electric bills.

“If not for the timely intervention of the ERC and the cooperation of power suppliers in deferring part of their charges, upward power adjustments would have been much higher especially last month,” Atty Jose Ronald V. Valles, head of the regulatory management office of Meralco, has noted.

On the other cost components in the bills, Meralco stated that transmission charges escalated by P0.0460 per kWh due to uptrend in ancillary services charges. At the same time, taxes, system loss and other charges logged a net increase of P0.0686 per kWh.

From last month’s supply procurements, Meralco said its power supply agreements (PSAs) billed higher by P0.2142 per kWh; mainly due to “higher international coal prices and lower dispatch of some PSAs.”

Conversely, charges from independent power producers had been down by P0.1541 per kWh; and that was mainly attributed to “the resumption of gas supply from Malampaya and improved dispatch of the Santa Rita and San Lorenzo gas plants.”

Meralco underscored though that even after the return-to-operation of the gas field, “First Gas plants still used alternative fuel due to continuing supply restriction.”

The power firm’s supply purchases from the Wholesale Electricity Spot Market (WESM) had not exerted that much pressure on its overall rates this month; because spot settlement prices as billed had been slashed by P0.0649 per kWh.

Meralco noted that the lower spot prices could be traced to “improved Luzon power supply situation amid fewer plant outages coupled with the reduction in demand.”

Per capacity generation source, the breakdown of Meralco’s supply procurements last month had been heftiest with PSAs at 45.7-percent; followed by its contracted independent power producers with 38.2-percent; while WESM’s share in the pie had been at 16.1-percent.

Source: Manila Bulletin (