DISTURBING QUESTIONS ON MERALCO’S INCREASE IN POWER GENERATION CHARGES THAT WE HOPE THE ERC WILL ASK THEM TO EXPLAIN

David Celestra Tan, MSK
15 February 2019

Meralco’s average rate is increasing this month by P0.5682 from P9.8385 Per kwh to P10.4067 per kwh. Meralco says Nothing to worry, it will cost the average consumer of 200kwh “only” an additional P114 this February. Gotta tell you this public hoodwinking is a work of art!

As they say in the power industry, the devil is in the details. Let us look closer.

Meralco’s Pass On Generation Charges

Meralco’s power generation charges actually increased P0.9820 per kwh from P4.9119 to P5.8939. The last time there was this one- month level of increase happened was during the last major Malampaya shutdown.

Your organization’s volunteer analysts have been tracking the Meralco power generation rates and you can see them above in our website.  Meralco’s power suppliers using coal have mind boggling rates from September to December 2018. AES in Masinloc charged P16.4591 per kwh in September,P13.7889 in October, P10.3589 in November, P8.7697 in December, and 6.9598 in January.  Is it because Masinloc is now owned a significant minority by EGAT, Meralco PowerGen’s partner?

The Aboitiz owned Pagbilao charged P7.0179 per kwh in September, P7.04 in October, P6.7847 in November, and P7.5231 in December.

San Miguel Sual charged P7.8325 per kwh in September, P9.7960 in October, P8.0332 in December, and 7.4205 in January. Meralco PowerGen controlled Panay Energy Development charged P7.0214 per kwh in September, P7.1141 in October, P6.9722 in November, P6.5463 in December, P5.7027 in January. Similarly, Meralco PowerGen affiliate Quezon Power in Mauban charged P6.4574 per kwh in September, P6.7133 in October, P5.8392 in November, and P6.1767 in December, and P7.2023 in January.

Since Meralco claims these were rates approved by the Energy Regulatory Commission, perhaps the ERC can look into why these rates have been higher than the approximate P5.00 per kwh they approved. What’s in their contracts that is allowing them to charge this much for many months? And why is the ERC allowing such escalation and pass on mechanisms?

The exception among the coal plants is the DMCI owned Semirara Calaca with rates of only P4.1399 in September, P4.1979 in October, P4.2030 in November, and P4.1664 in December, and P4.1232 in January. They use mainly local coal from Semirara Island and is exempted from the 12% VAT.

If we need more arguments to balance our energy mix with more LNG plants, let us look at their comparative generation charges. First Gas Sta Rita charged P5.2997 in September, P5.2631 in October, P5.2029 in November, P5.0935 in December, and P5.2430 in January. San Miguel Ilijan rates that also get its LNG supply from Malampaya were P5.6717 in September, P5.5097 in October, 5.2901 in November, P5.5552 in December, and  P3.3733 in January.

WESM Rates Increased? 

One of the perplexing claims in Meralco’s press statement is that “WESM rates rose P1.4141 per kwh due to tighter supply in Luzon”. According to Meralco’s own website data WESM prices were P3.4132 per kwh in October, 4.7677 in November, P3.7409 in December, and P3.7244 in January.

It appears the only reason Meralco’s generation rates have not skyrocketed to scandalous levels is the WESM rates have been low where it bought 17% of its energy needs, more than any other source. Is it a force of habit for Meralco to blame WESM even when it is actually the lowest and its’ saving grace?

Let us note that A big part of this lower WESM rates have been the entry of renewable energy projects whose rates are subsidized by the consumers under the Feed-In Tariff program of the government. We consumers are actually paying for saving the day for Meralco from its very high COAL rates.

This is something we hope the DOE and ERC will keep in mind in resolving the 3,551mw of Meralco PowerGen supply that will corner 80% of the energy purchases of Meralco starting in 2023 if Meralco gets their way.  They are all coal.

NGCP Rates

The other thing that is saving the day for Meralco is the drop in NGCP’s transmission charges by P0.4138 per kwh, a significant one.  Can we make these lower charges sustainable?

Truth in Advertising

Should there be ERC rules on truth in advertising?  ERC is already allowing Meralco to charge us consumers the high costs of these advertising and the salaries and benefits of their topnotch “public information” experts, the least they should be required is to be accurate and truthful in these numbers.  Their budget was not for public disinformation.

MatuwidnaSingilsaKuryente Consumer Alliance Inc.
matuwid.org
david.mskorg@yahoo.com.ph