Meralco rates down slightly for 2nd month

MANILA, Philippines — Manila Electric Co. (Meralco) rates will slightly decrease for the second straight month in June due to lower spot market prices, transmission charge and taxes.

Meralco said its overall electricity rates went down by P0.1948 per kilowatt-hour from P10.2866 per kwh last month to P10.0918 per kwh this month.

This means a household consuming 200 kwh a month will see a P38.96 decline in their bills this month. For households consuming 300 kwh, 400 kwh and 500 kwh, their bills will decrease by P58.44, P77.92 and P97.40, respectively.

Meralco said this second straight month of electricity rate decrease represents a total downward adjustment of around P0.47 per kwh since May.

The power distributor said lower wholesale electricity spot market (WESM) charges pulled down the generation charge, the electricity bill’s biggest component.

The generation charge decreased by P0.1350 per kwh from P5.5508 per kwh last month to P5.4158 per kwh.

Despite tight supply conditions in the Luzon grid, Meralco’s purchases from the WESM decreased by P0.3100 per kwh. WESM provided nine percent of Meralco’s supply needs.

“While the number of days on red alert as declared by the National Grid Corp. of the Philippines (NGCP) decreased from seven last month to two in May, the number of days on yellow alert increased from seven in April to 13 this month due to higher demand for power,” Meralco said.

On the other hand, cost of power from independent power producers (IPPs) and power supply agreements (PSAs) increased by P0.0556 per kwh and P0.0717 per kwh, respectively.

This is partly due to the weakening of the peso against US dollar, Meralco said. “Dollar-denominated costs of IPPs and PSAs account for 97 percent and 68 percent of their charges, respectively,” it said.

IPPs and PSAs provided 41 percent and 50 percent of Meralco’s supply needs, respectively.

Meanwhile, the 455-megawatt (MW) super-critical San Buenaventura coal fired plant in Quezon – a new PSA of Meralco – started commissioning tests this month and provided two percent of total energy requirements.

There were also new interim PSAs this month, particularly Therma Mobile and Millennium Energy which provided additional capacity in Luzon as emergency supply, Meralco said.

In terms of other bill charges, transmission charge for residential customers decreased by P0.0427 per kwh, primarily due to lower ancillary service charges from NGCP. Taxes and other charges also decreased by P0.0171 per kwh.

Meralco’s distribution, supply and metering charges, meanwhile, have remained unchanged for 47 months, after these registered reductions in July 2015.

To provide cost-competitive and green power supply to its franchise area, Meralco said it is pursuing 1,000 MW of green energy projects under newly formed MGEN Renewable Energy Inc. (MGreen) in the next five to seven years.

MGreen is a wholly owned subsidiary of Meralco PowerGen Corp. (MGen), which in turn is the power generation arm of Meralco. It will serve as the platform for the strategic push to develop renewable energy projects, primarily solar, wind and run-of-river hydro.

“Meralco is committed to developing large-scale renewable energy (RE) projects that can deliver competitive electricity for our customers, without any requirement for subsidy or support, while keeping environmental stewardship and sustainability as top priorities in our business,” recently appointed Meralco president and CEO Ray Espinosa said.

Meanwhile, consumer group Murang Kuryente challenged Meralco to scrap all coal-fired power plants in the pipeline and develop only RE projects.

“As the biggest distribution utility in the country, on top of its own power generation projects, Meralco is in a position to change the energy mix of the Philippines on its own. We hope that this change can be manifested in concrete solutions such as shutting down its Atimonan coal project instead of using RE just for PR purposes,” Murang Kuryente spokesman Gerry Arances said.

“Renewable energy is safer, more affordable and more sustainable than coal, and it is welcome to hear Meralco say they are committing to it. But we don’t want RE to be a token PR project of the company. Meralco should abandon all its coal-fired power plant projects and completely embrace RE,” he said.

Coal is currently the biggest provider of fuel for power plants in the Philippines, accounting for more than a third of the installed capacity in the country, with more coal-fired power plants planned for construction.