Philippines: Meralco reiterates normalization of rates starting September after 3-month refund

Philippines: Meralco reiterates normalization of rates starting September
after 3-month refund

MERALCO HAS ANNOUNCED ITS RATES FOR SEPTEMBER 2017, SIGNALING THE MONTH AS
THE BEGINNING OF ITS RETURN TO "PRE-REFUND LEVELS" AFTER COMPLETION OF THE
REFUND OF OVER-RECOVERY ON PASS-THROUGH CHARGES WORTH P6.9 BILLION FROM
JANUARY 2014 TO DECEMBER 2016.

In a statement released Thursday, electricity rates are up by P0.8642 per
kWh with a P9.2491 per kWh overall increase as compared to last month's
P8.3849.

In total, Meralco estimated an additional P173 in the electricity bill of
the average household with a 200-kWh consumption.

On the normalization of rates, the power company recently completed its
refund of over-recovery charges of over P6.9 billion, which the Energy
Regulatory Commission (ERC) granted provisional authority on May 11 and
implemented mid-year from June to August 2017.

As a result, the refund will be reflected as reductions in the different
sector charges of the bill, including Generation, Transmission, and System
Loss charges, as well as Lifeline and Senior Citizen subsidies.

Residents will enjoy a monthly reduction of around P0.88 per kWh (including
taxes), brought about by the refund adjustment. This would mean a total bill
reduction of approximately P530 over the three-month period for the average
household consuming 200-kWh.

On the other hand, the reason for the higher generation charge is due to the
increased Wholesale Electricity Spot Market (WESM) prices, which is up by
P1.7263 per kWh and affecting generation prices by P0.5615 per kWh.

Overall, the generation charge for this month went from P3.9763 per kWh to
P4.5378 per kWh, incorporating a reduction of P0.5355 per kWh in last
month's generation rate.

According to Meralco's assessment, there's a higher power demand in the
Luzon grid, as well as in the Power Supply Agreements (PSAs), which were all
impacted by the continuous decline of the peso and lower plant dispatch.

"Purchases from the WESM increased by P1.7263 per kWh as prices in the spot
market increased due to higher power demand in the Luzon grid. The cost of
power from Power Supply Agreements (PSAs) also registered a slight increase
of P0.0263 per kWh, mainly due to the peso depreciation and lower plant
dispatch," it said.

"The shares of WESM and PSAs this month stood at 12% and 42%, respectively,"
it added.

On a lighter note, Meralco reiterated there's a decrease in cost of power
charged by Independent Power Producers (IPPs), amounting up to P0.1117 per
kWh and improving the share of IPPs at 46% this August. This is due to the
improved dispatch of First Gas-Sta. Rita, which went through a scheduled
maintenance last month.

Meanwhile, other bill components such as distribution, supply, and metering
charges are unchanged since its registered reduction in July 2015. There's
also a slight decrease in the Transmission charge of a typical household
consumer by P0.0510 per kWh.

Taxes and miscellaneous charges, however, increased by P0.3537 per kWh this
month.

"(Other bill components) do not earn from the pass-through charges, such as
the generation and transmission charges. Payment for the generation charge
goes to the power suppliers, while payment for the transmission charge goes
to the NGCP (National Grid Corporation of the Philippines)," Meralco said.

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Link to Original Article:
http://powerphilippines.com/2017/09/07/meralco-reiterates-normalization-rate
s-starting-september/

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John Diecker
APT Consulting Group Co., Ltd.

www.aptthailand.com