Power rates up this August

By Neil Jerome Morales, The Philippine Star

Posted at Aug 08 2012 07:44 AM | Updated as of Aug 08 2012 08:02 PM

MANILA, Philippines - Customers of Manila Electric Co. (Meralco) will have to shoulder higher electricity rates this month as generation costs surged last month.

Actual generation charge that would reflect in consumers’ bills this month jumped 28 centavos per kilowatt-hour (kwh) to P6.7397 from July’s P6.4549 per kwh, Meralco said in a statement.

This marks the third consecutive monthly increase in generation charge, following the hike in July to P6.4549 per kwh from P6.1392 per kwh in June and P5.5962 per kwh in May. Meralco said rates might drop next month.

“As anticipated, the shutdown of the Malampaya pipeline for eight days in July affected the natural gas-fired power plants in Luzon, namely, Ilijan, Sta. Rita, and San Lorenzo,” Meralco said.

The Malampaya project, whose natural gas fuels three power plants with a combined capacity of 2,700 megawatts (MW) or about 40 percent of Luzon’s power generation requirements, underwent a scheduled preventive maintenance on July 13 to 20.

Hence, Lopez-led First Gen Corp.’s 1,000-MW Sta. Rita and 500-MW San Lorenzo natural gas plants were forced to use more expensive liquid condensate fuel to ensure steady supply.

San Miguel Corp.’s 1,200-MW Ilijan natural gas plant reduced its output.

“Because of Ilijan’s limited operations, a larger share of the power requirements in the Meralco area had to be obtained from the Wholesale Electricity Spot Market (WESM),” the power distributor said.

Meralco said it secured 12.6 percent of its needs from the WESM, up from 6.3 percent in the previous month.

“Charges from the WESM stood at P14.70 per kwh and remained to be the most expensive source of supply,” Meralco said.

Meralco said generation cost from independent power producers (IPPs) climbed 48 centavos to P5.58 per kwh. IPPs accounted for 45.6 percent of Meralco’s power requirements in July.

Meanwhile, rates from state-run National Power Corp. (Napocor), which shifted to the cheaper wet-season rates in July, fell 66 centavos per kwh to P4.99 per kwh.

Napocor provides 41.7 percent of Meralco’s power requirements.

“With better supply conditions this month with Malampaya and the affected power plants back online and barring generation disruptions from the other large power plants, it is probable that the generation charge will be more favorable next month,” Meralco said.

The generation charge, which is the electricity bill’s biggest component, accounts for 56 percent of the customers’ average monthly power bill. This charge goes directly to Meralco’s power suppliers.