Meralco expects power rates to drop this month

MANILA, Philippines — Manila Electric Co. (Meralco) expects a decrease in power rates this month on the back of lower capacity fees from its suppliers.

Meralco has yet to release final figures, but the official announcement of final figures would probably be next week.

However, January power rates are seen to have a downward trajection, resulting in lower power rates for the month, Meralco public information office head Joe Zaldarriaga said.

“As in previous years, during the month of January, lower PSA charges are typically brought about by a reduction in capacity fees as a result of the annual reconciliation of outage allowances done at the end of each year under the PSAs approved by the Energy Regulatory Commission (ERC),” he said.

As an example, in January 2019, the early completion of annual capacity payment for Sual Unit 1, Ilijan, Pagbilao Unit 1 and PEDC resulted in savings immediately passed on to consumers by way of lower electricity rates.

“We are hopeful a similar situation will occur once again this January 2020, as with previous years,” Zaldarriaga said.

In December, Meralco rates rose for the third straight month on higher generation charge pulled up mainly by wholesale electricity spot market (WESM) charges.

The overall rate for typical household consuming 200-kilowatt-hour (kwh) increased by P0.3044 kwh to P9.8623 per kwh in December from P9.5579 per kwh in November. 

WESM charges increased by P1.0799 per kWh driven by tighter supply conditions in the Luzon grid.

Meralco said the average capacity on outage in November increased by 525 (megawatts) MW because of scheduled and forced outages of some power plants and the natural gas supply restriction of Malampaya onshore gas plant implemented by operator Shell Philippines Exploration B.V. (SPEX) from November 10 to 14.