Power rates to increase in FebruaryDate Published: February 18, 2015
Even with increase, this month’s rates still lower than 2014 average
After three consecutive months of reduction, overall power rates will increase this month by P 0.84 per kilowatthour (kWh) for a 200 kWh household. This was mainly brought about by an upward adjustment in the generation charge. In addition, the transmission charge, taxes, and other charges also increased. A new line item, called FIT-All (Renewable), was likewise added to the bill beginning this month. The distribution charge, however, did not register any movement. With the overall rates now at P10.51 per kWh, this is still lower compared to rates in February 2014, which was at P11.04 per kWh. This month’s rates are likewise lower than the average for 2014, which was P10.72 per kWh.
Generation charge increase due to various factors
Increase in PSA rates
The generation charge went up by P0.52 per kWh, mainly due to a P1.00 per kWh increase in the rates of generation companies under the Power Supply Agreement (PSA), as capacity fees normalized from a low level in the preceding month. For the year 2014, SPPC-Ilijan, SMEC-Sual and TLI-Pagbilao had not fully utilized their respective outage allowances. Thus, they were able to operate more days resulting in accelerated collection of their fixed annual capacity fees. The remaining unpaid amount of the fixed fees by the December supply month, was thus, greatly reduced.
Lower plant dispatch
Generation costs also went up due to the lower dispatch of most generation companies. This could, in part, be attributed to the lower demand in the January supply month, which covered the Christmas holidays and the five-day holiday in NCR. The January 2015 supply month was likewise cooler (by six percent) compared to the December 2014 supply month. Contributing also to the lower dispatch levels were the scheduled outages of Masinloc and Quezon Power, and the forced de-rating of Ilijan. The effects of the lower dispatch levels was partly mitigated by lower fuel prices (coal and natural gas), so that the fuel component from both PSAs and Independent Power Producers (IPPs) went down. IPP charge registered a net reduction of P0.08 per kWh. Higher incidence of scheduled and forced outages of generating plants during the January supply month likewise had an upward pressure on WESM prices. However, the higher trading prices in the WESM were offset by a reduction of billing adjustments from prior months, so that WESM charges registered a net reduction of P1.15 per kWh. The PSAs’, WESM’s, and IPPs’ share to Meralco’s power requirements were at 49, 4, and 47 percent, respectively.
Increase in other charges
In addition to the generation charge, the transmission charge also went up by P 0.12 per kWh. This was brought about by the increase in both the wheeling and ancillary charge components of NGCP's billing. Taxes also went up by around P 0.08 per kWh, while other charges (system loss charge and lifeline subsidy) increased by P 0.08 per kWh. The February 2015 billing will also reflect the new FIT-All (Renewable) charge of P 0.04 per kWh, a uniform charge that will be billed to all on-grid electricity consumers nationwide in support of the Feed-in-Tariff Program. This charge will form part of the fund which the National Transmission Corporation (TransCo) will use to pay the FIT-eligible Renewable Energy (RE) developers for the energy they will produce. The FIT program is a mandate under Section 7 of the Renewable Energy Act of 2008. 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 such as the plants selling to Meralco through the WESM and under the PSAs, as well as the IPPs. Payment for the transmission charge, meanwhile, goes to the National Grid Corporation of the Philippines (NGCP). Of the total bill, only the distribution, supply, and metering charges accrue to Meralco.