Philippines - Meralco: January power rates down by 27¢ per kwh

Philippines - Meralco: January power rates down by 27¢ per kwh

Electricity rates registered a decline in January mainly due to lower
generation charge, Manila Electric Co. (Meralco) said yesterday.

Meralco announced yesterday a P0.2703 per kilowatt-hour decrease to an
overall rate of P8.09 per kwh, the lowest since October 2009.

A household with a 200-kwh consumption will see a reduction of P54.05 this
month. Bills of 300-kwh household will be reduced by P81.09, P108.11 for
400-kwh households and P135.14 for 500-kwh households.

Meralco said the decrease in January rates is mainly because of the lower
generation charge, the biggest component in electricity bills.

The generation charge for the month was at P3.70 per kwh, the lowest since
October 2004, the power distributor said.

Meralco said the lower generation charge resulted from the P0.59 per kwh
decrease in the cost of power supplied by power supply agreement (PSA)
plants, mainly due to lower capacity charges of Pagbilao and Ilijan.

The reduction in capacity fees is due to the annual reconciliation of outage
allowances that is done at the end of each year under the contracts approved
by the Energy Regulatory Commission. However, the capacity fees from these
suppliers will normalize in the following month.

Meanwhile, the cost of power from the Independent Power Producers (IPPs)
showed a slight reduction of P0.0005 per kwh because the improved dispatch
of the First Gas-Sta. Rita plant effectively offset the effects of the lower
dispatch levels of Quezon Power and First Gas-San Lorenzo.

The last component of the generation charge, which is the Wholesale
Electricity Spot Market (WESM) charges, had a very minimal adjustment of
P0.0267 per kwh.

The share of PSAs stood at 39.7 percent, of IPPs at 38.4 percent and of WESM
at 21.8 percent.

However, there was a slight increase in the transmission charge of
residential customers by P0.0042 per kwh.

But taxes and other charges decreased by a combined amount of around P0.0394
per kwh.

Meralco's distribution, supply and metering charges, on the other hand, have
remained unchanged for 18 months.

Malampaya shutdown

As for the Malampaya shutdown, Meralco is ordered to check if there are
still rebates for its customers since there is an estimated P1.44 per kwh
increase in March bills, Department of Energy (DOE) Undersecretary Felix
William Fuentebella said in a briefing yesterday.

"Meralco has submitted its simulation amounting to P1.20 per kwh without VAT
and P1.44 per kwh with VAT. But (Energy) Secretary (Alfonso) Cusi ordered
Meralco to check if it still has charges to refund consumers… Meralco
agreed," the DOE official said.

Based on latest data from the National Grid Corp. of the Philippines, the
Luzon grid will lose around 2,170 megawatts of capacity – higher than the
earlier projection of 1,850 MW – when the Malampaya project undergoes
maintenance from Jan. 28 to Feb. 16.

This is because of the unscheduled outage of South Luzon Thermal Energy
Corp. (SLTEC) and of Units 5 and 6 of Tiwi plants in Albay, Fuentebella
said.

Two units of SLTEC that went on unplanned outage have a combined capacity of
243 MW, while Units 5 and 6 of the Tiwi plant have 76 MW in capacity.

To augment supply, the 97-MW Avion natural gas plant and government's Malaya
thermal power plant will run during the Malampaya shutdown, Fuentebella
said.

The DOE, through Meralco, has tapped Interruptible Load Program participants
with a total of 900 MW enrolled power capacities, which would augment supply
during critical periods.

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Link to Original Article:
http://www.philstar.com/headlines/2017/01/13/1662296/meralco-january-power-r
ates-down-27c/kwh

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John Diecker
APT Consulting Group Co., Ltd.

www.aptthailand.com