Meralco: Slump in demand may cut Dec power rates

By Lenie Lectura – December 7, 2020
from Business Mirror

The Manila Electric Co. (Meralco) said Sunday that a drop in electricity demand could lead to lower generation charge this month.

The company hinted at the possibility that the electricity rate for December may go down as generation charge makes up the bulk of the monthly power bill of consumers.

“Initial data suggests slightly lower generation costs for December due to a decrease in demand,” said Meralco Spokesperson Joe Zaldarriaga said.

He said the recent typhoons Quinta, Rolly, and Ulysses damaged transmission lines while several large plants went on forced outage. A cooler weather and the damaged power facilities led to a decrease in electricity demand.

While this happened, electricity spot market prices reached P20 per kilowatt hour (kWh) and P22/kWh on October 27 and 28, respectively. However, the Wholesale Electricity Spot Market (WESM) was suspended by the Energy Regulatory Commission (ERC) from November 12 to 13. Thus, WESM prices may not be affected by the increase in plant outages due to the typhoons.

“Note as well that Luzon grid demand in November decreased due to occurrence of the weather disturbances. From October 2020’s peak demand of 10,344 MW, November 2020 peak demand decreased to 9,886 MW.

In sum, the effect of more plant outages seems to be offset by a decrease in demand, so generation costs appear on a downward trajectory,” Zaldarriaga said.

The overall power rate decrease since the start of 2020 has reached P1.35 per kWh. “We still expect the power rates this year to be significantly lower than that of the previous year, especially given the projected flattish or even lower rate movement in December,” he added.

Last month, Meralco rates declined to P8.5105 per kWh from October’s P8.5500 per kWh. This is equivalent to a decrease of around P8 in the total bill of residential customers consuming 200 kWh.

This was brought about by a lower generation charge, which stood at P4.2018 per kWh from P4.2233 per kWh in October. The decline in the generation charge was mainly due to the P1.2800 per kWh reduction in charges from the WESM.

Meralco, meanwhile, assured its customers that it will not implement any disconnection on account of nonpayment of bills until December 31.