The Philippine Online Chronicles

Manila Electric Co. (Meralco) customers will pay more for electricity starting this month as the power-distribution utility raised its generation charge by P0.14/kWh due to increase in cost of power that Meralco sources from its suppliers. For the October billing, power rates will increase by an average of 9 centavos per kilowatt-hour (kWh).

The generation charge, a pass-through charge, averages about 60 percent of the electricity consumer’s average monthly power bill.

The increase is attributed to the higher generation cost by First Gen Corp's natural gas plant due to a supply restriction at Malampaya natural gas field in Palawan last month. Meralco's other independent power producers (IPPs) - the Santa Rita gas plant in Batangas and Quezon Power Philippines coal plant also imposed an average increase of P0.32/kWh. Power purchased by Meralco from the Wholesale Electricity Spot Market (WESM) also increased by P0.11/kWh. Only National Power Corp. (Napocor) reduced power cost by P0.33/kWh. The peso-dollar depreciation also contributed to the generation charge increase.

IPPs account for majority or 48 percent of Meralco’s total generation requirements, followed by Napocor’s 45 percent. The remaining 7 percent was sourced from WESM.

Inquirer.net reported that customers consuming 100 kWh a month will have to pay P14.19 more, while those using 200 kWh a month will pay P28.38 more for their October billing. Households consuming 300 kWh and 400 kWh monthly will have to pay an additional P42.57 and P56.76, respectively.

The increase in generation charge will be mitigated by a reduction in Meralco's own charges. In an October 6 order, the Energy Regulatory Commission (ERC) directed Meralco to reduce an average of P0.05/kWh average in its distribution, supply and metering rates to P1.6012/kWh from P1.6464/kWh for the 1st year of its 3rd regulatory period (July 2011-June 2015), and to implement the reduction starting this month.

Meralco's first vice president Ivanna de la Peña explained that the reduced distribution, supply and metering charges will be in effect until June 2012, while the changes in the generation charge will still be done on a monthly basis.

Households that consume up to 200 kWh per month make up about 74 percent of its 4 million residential customers. Meralco’s franchise area covers Metro Manila, parts Batangas, Laguna, Quezon and Pampanga; as well the entire provinces of Bulacan, Cavite and Rizal.