Costs of power outages charged to users @ ₱0.0798/kWh

 

There are two factors that pushed up wholesale electricity market prices (WESM) charges: the increase in Luzon demand and the simultaneous generation plant outages, says Meralco VP and head of utility economics Lawrence Fernandez.
He says the demand in the grid increased by 1,131 megawatts from 10,425 MW in April to 11,556 MW in May is attributed to increase in temperature and economic activity.
It may be recalled that the Luzon grid was placed on yellow alert on 5 May because of insufficient operating reserves as the average capacity on outage remained at the 3,000 MW level. In the same period last year, capacity on outage was around 2,700 MW.
For extended periods, this resulted in persistent high WESM prices, triggering the imposition of a secondary price cap on 4 to 7 May and again on 20 to 22 May.

 

MANILA — The Manila Electric Co. has increased power rates for June, because of the higher wholesale electricity market prices (WESM) experienced in the previous month.

Joe Zaldarriaga, Meralco vice president and head of corporate communications, says during a virtual briefing that the overall rate for a typical household increased by ₱0.0798 per kilowatt-hour from last month’s ₱8.5920 per kWh to ₱8.6718 per kWh.

He said this was equivalent to an increase of ₱16 in the total bill of a residential customer consuming 200 kWh, ₱24 for those consuming 300 kWh, ₱32 for 400 kWh, and ₱40 for 500 kWh.

This month’s overall rate is still lower than last year’s rate by ₱0.0534 per kWh and is also the lowest rate for June since 2018.

This month’s generation charge, however, rose by ₱0.0697 per kWh from ₱4.5474 per kWh to ₱4.6171 because of the higher WESM charges.

WESM charges increased by ₱1.6322 per kWh due to tight supply conditions in the Luzon grid.

Meanwhile, “triggering of the secondary price cap indicates that spot market prices were consistently high for several days,” says Fernandez.

However, the increase in WESM charges was mitigated by the lower charges from the power supply agreements (PSAs) and independent power producers (IPPs), which decreased by ₱0.0476 per kWh and ₱0.0037 per kWh, respectively.

 

Further breakdown of bill components

“The reduction in the PSA and IPP charges were brought about mainly by the improved utilization of power plants plus the appreciation of Philippine peso. From ₱48.10, the peso appreciated to ₱47.70,” he says.

PSAs and IPPs provided 52 percent and 42 percent of Meralco’s energy requirement this month, respectively, and the share of WESM further declined to six percent.

Other bill components: transmission charge, taxes, and other charges for residential customers registered a slight increase of ₱0.0101 per kWh.

Unchanged for 71 months are Meralco’s distribution, supply, and metering charges after reductions in July 2015.

A refund in Meralco’s distribution rate true-up tempered the increase in this month’s electricity rates beginning last March. The refund rate for residential customers is P0.2761 per kWh as “Dist True-Up” in their bills.

The ERC has also provisionally approved Meralco’s proposal to refund around ₱13.9 billion over a period of 24 months or until the amount is fully refunded. The amount is the difference between the Actual Weighted Average Tariff and the ERC-approved Interim Average Rate for distribution-related charges for the period July 2015 to November 2020. (BG/Headline PH)

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