Power rates to go up by 3 centavos per kwh

MANILA, Philippines - Electricity rates will go up by around P6 this month for a typical household consuming 200 kilowatt-hours, or an increase of three centavos per kwh, the Manila Electric Co. (Meralco) said yesterday.

The increase in electricity rates comes after a five-centavo increase in May and 85 centavos in June.

This month’s rates went up amid higher generation and transmission charges because of several power plant outages, Meralco said.

Meralco had reduced its distribution charge but it was not enough to stop July rates from increasing.

Data from the power distributor showed that generation charge for this month went up by 10 centavos per kwh to P5.41 from P5.31 the previous months.

“This was primarily due to the 26-centavo and 10-centavo per kwh increase in the average rate of suppliers with Power Supply Agreements (PSAs) with Meralco, and the rate of independent power producers (IPPs), respectively,” Meralco said.

Lower dispatch of several plants as well as unplanned outages also pushed the cost of generation charge higher.

These include the scheduled outages of Team Energy’s Pagbilao 1, Lopez Group’s San Lorenzo Units 50 and 60 and forced outages of the Lopez Group’s Sta. Rita Unit 40, Calaca 1 and 2, AES Power’s Masinloc 1 and 2, the government-run Malaya 2,  Kepco Philippines’ Ilijan 2, Quezon Power, the Lopez Group’s San Lorenzo Units 50 and 60, GNPower-2 and Team Energy’s Sual-1.

“The resulting thin reserves brought about by these outages likewise led to frequent declarations of Yellow and Red Alerts for the supply month compared to the previous months,” Meralco added.

The National Grid Corp. of the Philippines placed the Luzon grid on red alert for four hours in June due to generation and transmission-related problems.

A red alert means severe power deficiency while a yellow alert means reserves are below the minimum level set by the regulator. Yellow alert is reached when the total reserve is less than the capacity of the largest plant on line. For the Luzon grid, this is usually equivalent to 647 MW, or one unit of the Sual Power Plant.

NGCP put the yellow alert for 27 hours in June compared to only 25 hours in May, eight hours in April and six hours in March.

The increase in generation charges, nonetheless, was offset by the P4.24 per kwh reduction in the average price of the Wholesale Electricity Spot Market (WESM), the country’s trading floor for electricity.

“A favorable peso-dollar rate coupled with cheaper coal prices tempered the increase in generation charge,” Meralco added.

In terms of share to Meralco’s total power requirements for the June supply month, PSAs, IPPs and WESM accounted for 53, 41, and 6 percent, respectively, data from the company showed.

The increase in transmission charge, meanwhile, amounted to P0.08 per kwh, which the NGCP said was mainly due to higher ancillary charges, which accounted for around 40 percent of the total transmission cost for the July billing.

Mitigating the increases in the generation and transmission charges for a residential customer consuming 200 kwh is a P0.15 per kwh reduction in the distribution, supply, and metering charges of Meralco.

The lower charges will remain from this month to June 2015, Meralco said, adding that it does not earn from the pass-through charges, such as the generation and transmission charges.