Net cut in Meralco bills starting this month

Manila Electric Co. (Meralco) customers will see a net cut in their January bills despite a rate increase effective the same month due to a drop in power acquisition costs. Meralco, the country’s largest power utility, said in a statement that customers can expect a P0.285 reduction in the generation charge to P3.9175 per kilowatt-hour (kWh) from P4.2029/kWh. Factoring in an average P1.4917/kWh approved increase for Meralco’s distribution, supply and metering charges for 2010, customers will still see a net reduction in their January bills, the firm said. For customers consuming up to 200 kWh a month, January bills will go down by P18.9. For those consuming up to 300 kWh/month, their bills will be reduced by P28.35. Customers consuming 400 kW will see bills cut by P47.8. Customers consuming 200 kWh on average account for almost a third of Meralco’s residential base. "We are just confirming our earlier projection that the generation charge will be lower this month. The main reason is the utilization by the natural gas plants last December of banked gas which is much cheaper, as it reflects price levels in 2002 and 2003," Joe R. Zaldarriaga, Meralco external communications manager, said in a statement. Lawrence S. Fernandez, Meralco utility economics manager, explained that banked gas "is indigenous natural gas from the Malampaya field that was bought and paid for by Meralco from 2002 to 2004 but not yet used for power generation." Mr. Fernandez said First Gas plants used up their contracted capacity up until November and relied on banked gas in December. The First Gas facilities are the 1,000-MW (MW) Santa Rita and 500-MW San Lorenzo plants in Batangas. "In 2009, since the First Gas plants used more gas than what was contracted for the year, they were able to use the lower-priced banked gas in December 2009, which reduced the cost of generation," he said. Meralco said the cost of power supplied by independent power producers (IPPs) had an average reduction of 56.3 centavos/kWh. Electricity from National Power Corp. and the Wholesale Electricity Spot Market, however, became costlier by almost seven centavos per kWh. "There has been a general downtrend in the cost of generation since May 2009. While we cannot ascertain until when this trend would continue, as the generation charge is heavily dependent on external factors like world oil prices and seasonal factors, we would like to assure our customers of our policy of finding the optimal mix of power that would yield the most reasonable cost to them," Mr. Zaldarriaga said. — Jose Bimbo F. Santos