Meralco expects slight rate hike in August billing

By Myrna Velasco – August 4, 2018, 8:14 AM
from Manila Bulletin

Customers of Manila Electric Company (Meralco) can expect relatively slight uptrend in overall electricity tariff in their August billing cycle in spite of higher gas prices because of the “cost offsetting” on some of the rate components, the utility firm said.

Meralco logo
/Manila Bulletin

“We see August rates as stable though the quarterly re-pricing of Malampaya, which is benchmarked on world crude prices, may cause a slight uptick in rates,” Meralco spokesperson Joe Zaldarriaga said.

He qualified that “the average Dubai crude in the second quarter of this year was higher than the average in the previous quarter.”

Malampaya gas is oil-indexed, hence, movement in global petroleum prices will trigger swings on the domestically produced gas from the field.

According to Meralco Vice President Lawrence S. Fernandez, the utility firm sourced roughly 60-percent of its requirements from the gas-fired power plants in the last supply month.

Despite the marked upswing in oil prices though, Meralco emphasized that it will still need to “consider the cooler temperatures which somehow tamed demand,” especially in July.

In addition, there had been no registered yellow alerts, which Zaldarriaga explained are factors that could help “mitigate the rise in natural gas prices.”

Fernandez added the higher prices then “may be offset by lower spot market prices as demand was generally lower in July versus June.”

In fact, the utility firm asserted that the rainy season and cooler weather phenomenon would likely soften demand in the second half of the year, which essentially would also be affecting its rates.

Meralco rates are adjusted on a monthly basis – with various components generally fluctuating primarily the pass-through items, except for regulated tariffs like its own distribution charge.