“The increase in rates was primarily due to the generation charge,” the distribution utility said, adding that recent plant outages resulted in higher charges from the Wholesale Electricity Spot Market (WESM).
For households consuming 200 kWh — which make up roughly three-fourths of Meralco’s customer base — the base charge adjustment will result in an increase of P58.63 in their electricity bills.
Those consuming 300 kWh, 400 kWh and 500 kWh can expect increases of P87.94, P117.25 and P146.57, respectively.
The July bill’s increase brings the net reduction in power rates since May to 25 centavos per kWh after drops the past two months amounting to a combined 54 centavos per kWh.
This month’s base rate is 77 centavos per kWh less than July 2015’s P9.38/kWh.
Meralco said the P4.06/kWh generation charge this month — computed from what the utility paid for electricity it bought from power producers in June — is 34 centavos/kWh more than June’s P3.72 per kWh, which the company said was the lowest since October 2004.
The current generation charge is 68 centavos less than July 2015’s P4.74/kWh and lower by 43 centavos than the average generation charge last year of P4.49/kWh.
The listed company pointed to the higher WESM charges as the main driver of the higher generation charge as this rose by P4.49/kWh after a drop to P3.97/kWh in June.
“This was the result of higher generation capacity on outage during the June supply month compared to the previous month, resulting in five instances of yellow alerts in June,” Meralco said, referring to the five days last month when the contingency reserve fell below the capacity of the largest generating unit.
In June, the second unit of the coal-fired power plant in Pagbilao, Quezon went on a scheduled shutdown along with the San Lorenzo and Sta. Rita natural gas power plants in Batangas, and iPower Corp.’s cogeneration plant.
The plants that were hit by outage were the first unit of the Sual coal power plant in Pangasinan, both units of the Calaca coal power plant in Batangas, and the two units of GN Power Mariveles Coal Plant Ltd. Co. Other plants that went on forced shutdown were the ones in Limay, Bataan, two in Sta. Rita, Batangas, those operated by Southwest Luzon Power Generation Corp. and South Luzon Thermal Energy Corp., one unit of the San Roque plant in Pangasinan, a unit in Pagbilao and another in Ambuklao, Benguet.
Meralco recalled that, in May, the Luzon grid did not experience any yellow or red alert when peak demand reached a record high of 9,727 MW.
“Due to the increased incidence of plant outages, too, Malaya 2 was dispatched for around half of the June supply month, when peak demand in Luzon dropped to 9,260 MW,” the company said.
The Malaya plants are “must-run” units and are instructed by the National Grid Corporation of the Philippines (NGCP) to be dispatched when reserve levels in the grid are extremely low.
Meralco said the cost of power from independent power producers (IPPs) also increased — although by a minimal 3 centavos — because of lower dispatch from the plant of Quezon Power (Philippines), Ltd. Co.
The cost of power from plants under power supply agreements (PSAs) dropped by 2 centavos per kWh, which the company said was driven primarily by the higher dispatch of the Ilijan combined cycle gas turbine plant in Batangas.
“The share of PSAs and IPPs in Meralco’s total power requirements stood at 49.2% and 42.0%, respectively. Meanwhile, the share of WESM went down from 12.8% the previous month to 7.8% in June,” the distribution utility said.
Transmission charge dropped by 8 centavos per kWh because of lower ancillary charges, while taxes and other charges rose by 1 centavo and 2 centavos per kWh, respectively, as a result of the increase in generation charge.
Meralco said its distribution, supply and metering charges were unchanged after posting a reduction a year ago.
The company reiterated that it does not earn from charges passed on to consumers 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,” it added.
Meralco’s controlling stakeholder, Beacon Electric Asset Holdings, Inc., is party owned by Philippine Long Distance Telephone Co. (PLDT). Hastings Holdings, Inc., a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc., has an interest in BusinessWorldthrough the Philippine Star Group, which it controls.