Power rates likely to rise again in March on weak peso
Power rates are expected to go up again in March on weak peso and following the shutdown of more power plants amid rising demand, retailer Manila Electric Co. said Monday.
“Last February, around 1,000 megawatts of plants were under maintenance shutdown, while demand in Luzon went up by around 400 MW. Hence, we expect there was pressure for higher WESM [Wholesale Electricity Spot Market] charges last month,” Meralco head of utility economics Lawrence Fernandez said.
WESM is the country’s trading floor of electricity.
“There was also further peso depreciation. We will also be reflecting in March the portion of generation costs from the February bill. These factors point to higher rates in March,” Fernandez said.
Meralco said the adjustment this month would include the P0.33-per-kilowatt-hour increase, which was a part of the P1.08-per-kWh hike for the month of February.
“We expect to be able to finalize/announce March rates by Thursday,” Fernandez said.
Meralco only raised P0.75 per kWh in last month’s billing, while announcing that the remaining P0.33 per kWh would be implemented in March.
Meralco earlier said that the full increase for February was not implemented to cushion the impact of higher electricity rates on consumers, cognizant of the fact that there were recent price increases on fuel and other basic commodities.
Meralco said the February adjustment brought the overall rate to P9.47 per kWh from January’s P8.72 per kWh, equivalent to an increase of P150 in the monthly bill of a residential customer consuming 200 kWh.
“Of the P0.8469-per-kWh increase in the generation charge, Meralco said that it will reflect an adjustment of P0.5780 per kWh this February, or from a generation charge of PhP4.0768 per kWh in January to PhP4.6548 per kWh this month,” it said.
The company said the generation charge increase in February was primarily due to higher charges from plants under power supply agreements and independent power producers.
“After the reduction in PSA charges reflected in January due to the early completion of annual capacity fee payments for the previous year, capacity fees returned to levels prescribed in the PSAs,” it said.
Meralco said despite the higher generation charges, its own distribution, supply and metering charges remained unchanged for 31 months or since July 2015.
Meralco said it was not earning from the pass-through charges, such as the generation and transmission charges. Payment for the generation charge goes to the power suppliers, while payment for the transmission charge goes to the National Grid Corporation of the Philippines.