Philippines: Electricity rates continue drop in Nov.

Philippines: Electricity rates continue drop in Nov.

Electricity rates for consumers in the franchise area of Manila Electric
Co. (Meralco) will decline further in November, as lower generation charges
bring down overall power rates to their lowest levels in almost seven years.

In a press statement, Meralco said the rate for a typical household will go
lower this month by P0.0781 per kilowatt-hour (kWh), thus bringing it down
to P8.26 per kWh-the lowest since January 2010.

"This month's decrease translates to a reduction of around P16 in the
electricity bill of a household with monthly consumption of 200 kWh," the
country's largest power distributor said. "The reduction is mainly due to
the downward movement in the generation charge."

This month's overall rate is lower by P0.29 per kWh compared to November
2015's P8.55 per kWh. This is also the fourth straight month of reduction in
the overall residential rate, Meralco added.

For November, the power distributor said there was a decrease in the
generation charge, which is P0.0502 per kWh lower than last month's P3.8938
per kWh.

At P3.8436 per kWh, the generation charge is around P0.24 per kWh lower
compared to November 2015's P4.08 per kWh.

"The decrease resulted mainly from lower charges from the Wholesale
Electricity Spot Market (WESM)," the company said. "This offsets increases
in independent power producer (IPP) and power service agreement (PSA) costs
brought about by higher coal and natural gas prices and low dispatch."

Overall charges from the WESM decreased by P0.2756 per kWh. The share of
WESM purchases to Meralco's total requirements went up from 16.1 percent to
20.1 percent.

Meanwhile, the cost of power sourced from plants under PSAs increased by
P0.0164 per kWh primarily due to higher fuel costs. Coal prices in the
region continued to rise, from $67.41 per metric ton in August 2016 to
$72.70 in September. The share of PSAs stood at 42.5 percent.

The cost of power from IPPs also increased by P0.0549 per kWh, primarily due
to the scheduled outage and lower dispatch of San Lorenzo, and the higher
cost of natural gas following its quarterly repricing. The share of the IPPs
to Meralco's total requirements for the October supply month was at 37.3
percent.

There was also a decrease in the transmission charge by P0.0177 per kWh,
mainly due to the reduction in the ancillary charge differential that
National Grid Corporation of the Philippines (NGCP) began to collect from
its Luzon customers in June.

Taxes and other charges also decreased by a combined amount of around
P0.0102 per kWh.

Electricity rates-1108"Meralco's distribution, supply, and metering charges,
meanwhile, have remained unchanged for 16 months, after these registered
reductions in July 2015," the company said, explaining that it does not earn
from the pass-through charges, such as the generation and transmission
charges.

A pass-through charge means the payment for the generation charge goes to
the power suppliers, while payment for the transmission charge goes to the
NGCP.

Meralco, in partnership with the Department of Energy (DOE) and local
government units, continues to give beneficiaries access to safer, legal
electricity supply as it makes power available to Filipinos previously
without any electrical connection.

From July 8 to Nov. 4 this year, the DOE-Meralco partnership has energized a
total of 20,101 households in the areas of Gaya-Gaya, San Jose del Monte and
other municipalities in Bulacan, Laguna, Cavite and some parts of Rizal,
Happy Land Aroma, the Baseco Compound, Isla Puting Bato and Parola Area in
Tondo, Manila.

Through these efforts, Meralco was able to continue supporting Energy
Secretary Alfonso Cusi's commitment to accomplish the marching order of
President Duterte to provide Filipino people the chance to enjoy a more
comfortable quality of life through the delivery of safe, stable and
reliable electricity services, the company said.

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Link to Original Article:
http://business.inquirer.net/218533/electricity-rates-continue-drop-in-nov

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John Diecker
APT Consulting Group Co., Ltd.

www.aptthailand.com