Meralco sees lower power generation charge

MANILA, Philippines — Manila Electric Co. (Meralco) expects lower generation charge this month amid a decrease in demand.

Meralco spokesperson Joe Zaldarriaga said indications point to a lower generation charge, the electricity bill’s largest component, this month.

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

This is despite several plant outages which push up wholesale electricity spot market (WESM) prices, in the past supply month.

Zaldarriaga said the recent Typhoons Quinta, Rolly, and Ulysses tripped transmission lines and  caused several large plants going on forced outage which led to WESM prices reaching P20 per kilowatt-hour (kWh) and P22 per kWh on Oct. 27 and 28, respectively.

However, he said that the WESM was suspended by the Energy Regulatory Commission (ERC) from Nov. 12 to 13.

“Thus, WESM prices may not be affected by the increase in plant outages due to the typhoons,” Zaldarriaga said.

The Meralco spokesman also noted the decrease in demand in the Luzon grid due to occurrence of the weather disturbances.

Data from the power utility showed November peak demand only reached 9,886 megawatts (MW) versus October’s peak demand of 10,344 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.

For the full year, Meralco’s overall rate are still lower compared to the previous year.

“It is worth mentioning that the overall power rate decrease since the start of 2020 is still more than one peso per kilowatt hour (1.35 pesos per kilowatt hour net overall rate decrease for the entire year),” Zaldarriaga said.

“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 said.

Last month, the Meralco rate went down by P0.0395 per kwh to P8.5105 per kwh from P8.5500 per kwh last month, largely due to lower generation charge as supply improved in the system.