WESM charges pushed up by power plant outages

MANILA, PHILIPPINES, 7th November 2019 – The Manila Electric Company (Meralco) announced today an upward adjustment of power rates, as the overall rate for a typical household consuming 200kWh increased to P9.5579 per kWh this November from last month’s P9.0862 per kWh. The adjustment of P0.4717 per kWh will mean an increase of around P94 in the typical household’s total electricity bill.

Despite the adjustment, electricity rates this month are still almost P1 per kWh lower than in April 2019.

Higher WESM charges lead to overall generation charge increase

From P4.5406 per kWh last month, the generation charge for November increased to P5.0317 per kWh, an upward adjustment of P0.4911 per kWh.

Charges from the Wholesale Electricity Spot Market (WESM) increased by P3.8016 per kWh driven by tighter supply conditions in the Luzon grid. The National Grid Corporation of the Philippines (NGCP) placed the grid on Yellow Alert last October 14 and 15 due to forced outages of several power plants and the maintenance shutdown of the Malampaya natural gas facility from October 12 to 15.

In addition, WESM charges rose as the Net Settlement Surplus (NSS) refund – ordered by the Energy Regulatory Commission (ERC) last August 1, 2019 — was significantly lower for November, at around P21 million only. The ERC-ordered NSS refund last September and October totaled approximately P1 billion, which greatly contributed to the lower generation charges for the two prior months. The NSS refund is expected to end this month.

The share of WESM to Meralco’s supply needs was at 16%.

Meanwhile, the cost of power from the Independent Power Producers (IPPs) and Power Supply Agreements (PSAs) decreased by P0.0476 per kWh and P0.2643 per kWh, respectively, due to higher average plant dispatch, lower coal prices, and the strengthening of the Peso against the US Dollar. Around 97% of IPPs costs and 60% of PSA costs are dollar-denominated. IPPs and PSAs provided 39% and 45% of Meralco’s supply needs, respectively.

Movements in Transmission and Other charges

This month, transmission charge for residential customers decreased by P0.0767 per kWh as a result of lower NGCP ancillary service charges. Meanwhile, taxes and other charges registered an increase of P0.0573 per kWh.

Meralco’s distribution, supply, and metering charges, meanwhile, have remained unchanged for 52 months, after these registered reductions in July 2015. Meralco reiterated that it does 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. Taxes and other public policy charges like the FIT-All are remitted to the government.

Meralco provides energy efficiency tips for customers

Meralco encourages its customers to continue practicing energy efficiency initiatives to help manage their electricity consumption. These include everyday household tips that may help save energy, such as: (i) unplugging appliances when not in use to avoid “phantom load”, (ii) using the aircon at mid-setting or at 25 degrees Celsius for maximum efficiency, (iii) using a power board or strip which can supply power to several appliances at once and allows a user to conveniently turn them off simultaneously with just one switch, and (iv) maximizing natural light during daytime and keeping appliances well maintained to ensure optimal performance. For more helpful tips, customers may visit Meralco’s website at www.meralco.com.ph or its social media accounts, twitter@meralco and facebook at www.facebook.com/meralco. (Meralco/PR)

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