MANILA, Philippines - Customers of Manila Electric Co. (Meralco) will see a P0.5648 per kilowatt hour (kWh) hike in their bills this month due to the increase in the cost of power from suppliers.

The increase in the generation charge should have been P1.00 per kWh, but this was offset by the suspension of the P0.27 per kWh rate increase under the performance-based regulation (PBR) scheme and the completion of Meralco's amortized collection of underrecoveries last month, said Meralco vice president and utility economics head Ivanna dela Peña.

"Our recent suspension of the PBR adjustment will temper the increase in the generation charge by an average 26.9 centavos per kWh. Also, since Meralco already completed its amortized collection of P8.8 billion in generation charge underrecoveries last month, the billing component 'Previous Months Adjustment on Generation Cost' under generation will be reduced by 16.62 centavos per kWh. These 2 developments which will be reflected starting Meralco's February billing will cushion the impact of the generation charge increase by around 44 centavos per kwh," dela Peña explained.

The hike in generation charge this February was due to higher cost of power sourced from independent power producers, the National Power Corp., and the Wholesale Electricity Spot Market.

Dela Peña said consumers must brace for higher power rates this year as a repeat of the conditions that led to a cumulative drop of P1.10 per kWh in power rates last year is unlikely to happen.

"Rains were abundant last year, resulting in sufficient levels of hydro generation. El Niño is expected to bring the dams to critical levels and would cause temperatures to rise, fuelling higher demand. For most part of last year, demand was down because of the global economic slowdown. This year, the economy is expected to rebound, putting upward pressure on electricity use," she noted.

Late January, several areas of Metro Manila and Luzon were hit by rotating brownouts after a major coal power plant had pump trouble and several other plants underwent maintenance.

Dela Peña said the one-month preventive maintenance work at Camago-Malampaya would further restrict supply from February 10 to March 11, when demand is expected to ramp up because of the onset of the summer season.

Stakeholders in the power industry have already met to map out a plan on how to temper the impact of the looming dry spell, and maintenance work at power plants.

Meralco external communications manager Joe Zaldarriaga, meanwhile, reiterated that Meralco does not earn from the generation charge since this is merely a pass-through charge which may go up or down depending on the cost of the energy that the distributor purchases from its suppliers.