Meralco hikes generation charge this month

Posted at 01/25/2014 9:17 AM

MANILA, Philippines - Generation charge rose even higher this month compared to the December 2013 rate even when the 650-megawatt Malaya thermal power plant in Luzon went online, data from the Manila Electric Co. (Meralco) showed.

This strengthens the argument raised by energy officials during Thursday’s Senate hearing on power rates that running the Malaya plant while the Malampaya gas plant was on a month-long maintenance shutdown would not have lowered electricity rates.

Senate energy committee chairman Sen. Sergio Osmeña III said during the hearing the opposite was true.

However, data showed that while Meralco’s generation charge was pegged at P5.67 per kilowatt-hour because of a 60-day temporary restraining order issued by the Supreme Court, the figure has actually climbed to P10.23 per kilowatt-hour in January, based on the December 2013 supply month or when the Malaya plant went online.

The figure was higher than the P9.10 per kwh for December 2013.

The generation charge is the cost of power purchased by Meralco from power producers the previous month. It accounts for 65 percent of consumers’ monthly electricity bill.

“All of these information need further investigation. We are doing that,” Energy Secretary Carlos Jericho Petilla said yesterday.

He agreed that based on data from Meralco and from the Wholesale Electricity Spot Market (WESM), electricity prices rose further when the Malaya plant went online from Dec. 2 to 10.

“We had more supply in 2013 than in 2010 and yet prices were higher,” Petilla said.

During Thursday’s hearing, Meralco president Oscar Reyes said that had Malaya been dispatched, rates would not have skyrocketed.

It’s still collusion

As energy officials and power firms blamed each other for the surge in electricity rates, party-list group Bayan Muna insisted yesterday generating companies had colluded with one another to manipulate power cost.

Rep. Neri Colmenares said the statement of Petilla before the energy committees of the House of Representatives and the Senate that there was sufficient power supply from November to December last year “means that the price of electricity drastically and substantially went up not because there was an increase in the generation companies’ production cost or lack of supply but because energy players colluded or manipulated the price to go up.”

He said prices in the WESM should not have shot up to as much as P62 per kwh if indeed there was sufficient supply.

It was upon Bayan Muna’s petition that the Supreme Court (SC) stopped Meralco from collecting higher rates in December.

At the Senate, Majority Leader Alan Peter Cayetano is calling for a high-level meeting between the public and concerned private groups on possible amendments to the Electric Power Industry Reform Act (EPIRA) and some tax laws.

ACT Teachers party-list Rep. Antonio Tinio, for his part, said Congress should pass a law allowing the government to own and run electric power plants.

“It’s now clear that the urgent task of Congress is to pass new legislation that will allow government to re-enter power generation with the primary responsibility of ensuring stable and affordable electricity for consumers,” he said. – With Marvin Sy, Jess Diaz, Paolo Romero