Power rates up this month

MANILA, Philippines - Power rates will go up this month because of higher generation charge, partly pushed up by the May 8 Luzon-wide power outage, the Manila Electric Co. (Meralco), the country’s biggest power distributor, reported yesterday.

In its announcement, Meralco said power rates would increase by 22 centavos per kilowatt-hour (kwh), to be reflected in the June electricity bills.

The increase would translate to a P44 increase in the June bill of a typical household consuming 200 kwh.

Meralco, a company led by businessman Manuel Pangilinan, said the generation charge for June increased by 19 centavos per kwh to P5.66 per kwh.

The power utility nonetheless noted that this month’s generation charge was 48 centavos lower than the generation charge in June 2012.

The increase in generation charge stemmed from higher cost of power purchased from the Wholesale Electricity Spot Market (WESM), the

country’s trading floor for power.

Electricity purchased from WESM increased by 27 centavos per kwh.

“The May 8 incident had an adverse effect on generation charge as it limited the output of a number of generators supplying to Meralco,

particularly San Miguel Energy (Sual), South Premiere Power (Ilijan), Sem-Calaca Power, and First Gas. This, in turn, resulted in higher dependence on the WESM,” Meralco said.

On May 8, a power outage hit Luzon. The system-wide blackout stemmed from a tripping in the Talisay transmission line of the National Grid Corp. of the Philippines (NGCP), the country’s transmission highway operator, which in turn was caused by a bush fire, officials earlier said.

Independent power producers (IPPs) Quezon Power and First Gas also posted an average increase of 18 centavos per kwh due to higher effective fuel cost per kwh, following the weakening of the peso against the dollar.

Nevertheless, plants selling to Meralco under the new power supply agreements (PSAs) still offer the lowest rates, registering a 1-centavo decrease.

The PSAs and IPPs accounted for 50 percent and 38 percent, respectively of Meralco’s total energy requirement in May.

Meralco sourced the remaining 12 percent from the WESM and state-owned National Power Corp. (Napocor), among others.