Gov’t monitoring power rate adjustments

MANILA, Philippines - The government is monitoring adjustments in power rates following the announcement of the Manila Electric Co. (Meralco) that it will increase its rates this month due to higher generation costs and growing demand for power this summer, a Malacañang official said yesterday.

“Government continues to monitor electricity price movements to ensure that these are not excessive,” Secretary Herminio Coloma Jr. of the Presidential Communications Operations Office said. 

He said the Department of Energy under Secretary Jericho Petilla is closely monitoring the day-to-day energy situation amid the tight power supply this summer.

Coloma, however, justified Meralco’s announced increase of 89 centavos per kilowatt-hour in electricity consumption, saying the adjustment is based on “market-driven pricing.” 

Meralco said the rate hike was due to tight supply brought about by the shutdown of some power plants and the surge in demand from consumers.

The adjustment translates to an increase of P178 in the electricity bills of an average household consuming 200 kwh.

Power demand increases during summer months due to frequent use of air-conditioners, electric fans and other appliances.  

Meralco said April generation charge rose by 69 centavos per kwh to P5.90 per kwh from P5.21 per kwh in March.

Generation charge refers to the cost of power sold by power producers to distribution utilities. It accounts for roughly 60 percent of the total electricity bill.

The power distributor said demand last March increased by 200 megawatts or equivalent to the consumption of 10 malls.

It also attributed the increase in generation charge to higher prices at the Wholesale Electricity Spot Market (WESM), the country’s trading floor for electricity.

WESM prices rose to P21.59 per kwh in March from the pervious month’s P4.90 per kwh, or an increase of P16.69 per kwh.