Meralco sees slight increase in generation charge for January

Meralco sees slight increase in generation charge for January

POWER distributor Manila Electric Co. (Meralco) is expecting a slight increase in the cost of power from suppliers this January, the company’s spokesman said on Monday.

“We are still completing the billing from our suppliers, but initial indications show that there may be a very minimal increase in the generation charge in the January bills,” Joe R. Zaldarriaga, Meralco spokesperson and vice-president for corporate communications, said in a Viber message.

He noted higher charges from the Wholesale Electricity Spot Market (WESM), the trading floor of electricity.

Data from the Independent Market Operator of the Philippines showed that the average electricity price in WESM increased to P4.74 per kilowatt-hour (kWh) as of Dec. 25, from P4.12 per kWh in November.

Mr. Zaldarriaga said this was likely linked to a rise in the average capacity in the Luzon grid that is unavailable due to outages.

Some power plants are undergoing scheduled maintenance shutdown in preparation for the summer months, he said.

In December last year, the power distributor implemented a reduction from P12.0545 per kWh to P11.2584 per kWh amid a decrease in generation charges.

Generation charge usually accounts for more than half of a consumer’s total monthly electricity bill. 

Meanwhile, Bienvenido S. Oplas, Jr., president of Minimal Government Thinkers, expects a slight decrease due to lower coal prices in December-January and a lower Dubai crude price, to which the Malampaya gas price is pegged.

“But Meralco noted higher plant outage in WESM, so this may cancel out any potential price decrease,” he said in a Viber message.

Mr. Oplas said that he expects power rates to drop in the first quarter despite the onset of El Niño and upcoming dry months.

“This will affect and reduce hydro output, raise power demand, but since this is a mild El Niño, at least in Metro Manila and neighboring provinces, power demand will not rise as projected by alarmist models and scenarios,” he said.

Meralco said it has prepared to ensure the delivery of power to its consumers with the bid launch for interim power supply agreements (IPSAs) covering a 260- MW peaking requirement and 400-MW baseload requirements.

The power distributor also said that it aims for the procurement to be “ready in time for the summer months when demand usually spikes.”

The deadline for generation companies to submit expressions of interest for both IPSAs is Jan. 15.

A pre-bid conference will be held on Jan. 22, while the bid submission deadlines for the 260 MW and 400 MW are set on February 26 and 27, respectively.

“I would also like to remind our customers to be mindful of their consumption and continue practicing energy efficiency,” Mr. Zaldarriaga said.

Meralco’s controlling stakeholder, Beacon Electric Asset Holdings, Inc., is partly owned by PLDT Inc.

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