Meralco: Higher power bill in March due to generation charge
BY LENIE LECTURA – MARCH 9, 2022
from Business Mirror
Power lines run beside a sign for the Manila Electric Co. (Meralco) Makati branch in Manila, the Philippines, on Monday, March 23, 2009. Manila Electric Co. is the largest Philippine power retailer. Photographer: Nana Buxani/Bloomberg News
The Manila Electric Co. (Meralco) warned of increasing power rates for March but this month’s electricity bill does not yet reflect the incessant rise in oil prices.
“Initial indications show that after two consecutive months of reductions, there could be an upward adjustment in the March bills due to higher generation charge,” said Meralco utilty economics head Lawrence Fernandez.
Generation charge makes up the bulk of billing charges.
Meralco will announce Thursday the final power rates for March.
Fernandez said Wholesale Electricity Spot Market (WESM) prices remained elevated in the February supply month, and despite the absence of Yellow Alert, the secondary price cap was implemented 5.63 percent of the time.
Also expected to contribute to the generation charge is the higher share of supply from WESM as a result of the scheduled maintenance and Quezon Power and San Lorenzo power plants. Fernandez said these maintenance shutdowns were performed in February to ensure the availability of their supply during the dry months and the election period.
Moreover, the continuing depreciation of peso is also seen to magnify the effect of high fuel prices in the world market.
Fernandez stressed that these are pass-through charges and as far as Meralco’s own cost is concerned, the distribution charge has not moved since its reduction in July 2015.
This month’s power rates do not yet reflect rising oil prices. Fernandez explained that movements in world crude oil prices affect Meralco’s generation costs indirectly, mainly through the Malampaya gas prices. This, he added, will be updated in April, which will then be reflected in the May bills of customers.
“The current Malampaya price is based on world crude oil prices from July to December 2021, so that the price does not yet reflect the recent surge in oil prices. These will be priced into Malampaya beginning the second quarter, to be reflected beginning the May 2022 generation charge,” he said.
This will affect the power supply agreements with Sta. Rita, San Lorenzo, and San Gabriel, which account for around one-third of Meralco’s supply requirements for the captive market.
