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Meralco bills to increase by P0.25 per kWh this month

abs-cbnNEWS.com | 11/06/2009 6:16 PM

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MANILA - Customers of power distributor Manila Electric Co. (Meralco) will see a 25-centavo per kilowatt hour (kWh) increase in their bills this month following a hike in the cost of power from generators.

In a statement, Meralco vice president and utility economics head Ivanna dela Peña said the increase in generation charge should have been 32.7 centavos but this was tempered by a 6-centavo reduction in transmission charges and the 1.7-centavo power purchase adjustment or PPA refund ordered by the Energy Regulatory Commission.

"Given these mitigating factors, customers will see a net increase of about 25 centavos per kWh. The cooler weather at this time of the year would also temper the effect of the said generation rate adjustment on the over-all bills of customers," dela Peña said.

According to her, this month's increase was due to a number of factors such as the lower dispatch of Meralco's independent power producers following reduced consumption in the October supply month given the back-to-back typhoons that hit Manila and other parts of Luzon.

Prolonged power outages in some portions of Meralco's franchise area due to the trouble in one of the transformers in the Dolores Substation of the National Grid Corporation of the Philippines, and higher cost of power from the National Power Corp. and the Wholesale Electricity Spot Market likewise contributed to the overall increase in generation charge.

Dela Peña also citied higher fuel cost and the slight depreciation of the peso as partly to blame for the increase.

She stressed, however, that even with the increase, the generation charge of P4.2286 per kWh this month is still lower than levels prevailing in the first semester of 2009 which peaked at P5.02 per kWh in April.

Meralco external communications manager Joe Zaldarriaga, for his part, said: "After a series of reductions in the generation charge for the past 6 months, it is not surprising to expect that rates will register an upward movement [sooner or later]. As we have been explaining to our customers, the generation charge may vary from month to month depending on the cost of energy supplied by the power producers, and this recent adjustment merely reflects the interaction of various factors contributing to the effective cost of power generation."

Meralco has consistently stated that it 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 Meralco purchases from its suppliers.