Meralco hikes generation charge as rotating brownouts hit three hours

Customers of Manila Electric Co. (Meralco) were greeted yesterday with even longer three-hour brownouts and the announcement of a nearly one peso per kilowatt-hour (kWh) increase in power rates. The generation charge adjustment, along with last week’s announcement that Meralco’s distribution rate would be raised by some 27 centavos per kWh starting April, means households consuming an average 200 kWh monthly -- this class comprises a third of the utility’s customer base -- will need to pay an extra P240. The firm said this month’s generation charge -- which reflects the cost of power purchased from suppliers -- would go up by 93 centavos to P6.7699/kWh due to high prices at the Wholesale Electricity Spot Market (WESM). Meralco Vice-President Ivanna G. dela Peña told reporters the generation charge was now "the highest ever" for Meralco. Last week, Meralco announced that the Energy Regulatory Commission (ERC) had lifted the deferment of a distribution charge increase, leading to an average P0.2690 adjustment P1.4917/kWh beginning this month. It said consumers using 200 kWh monthly would see a P53.80 increase. Yesterday’s generation charge adjustment translates to an average P186 rise in monthly power bills, for a total increase of P239.80. Meralco said that while WESM prices had fallen slightly for the April billing period, rates were still high given the lack of power in the Luzon grid. The generation charge has been increased by some 58% since the start of the year, when it was at P3.9175/kWh. Meralco, in a statement, said the cost of WESM power averaged P11.36/kWh for April billing, a slight decrease from P12.1557/kWh previously. It said the high prices were "a result of shortage in electricity supply, as there were several plants which were either out due to preventive or emergency maintenance, or with de-rated capacity because of the El Niño phenomenon." Ms. dela Peña said there were no other supply options last month aside from the WESM. The high generation charge also reflected the use of costlier condensate fuel at First Gas Corp.’s Sta Rita and San Lorenzo plants. The announcement of Meralco’s rate hike, meanwhile, came as the firm lengthened rotating brownouts caused by a supply lack to three hours from two on Wednesday and just an hour last Tuesday. The Luzon grid was said to be 924 megawatts (MW) in deficit, up from Wednesday’s 662-MW shortfall and Tuesday’s thin reserve of just 83 MW. Details of the supply situation were not immediately available from the National Grid Corporation of the Philippines. This week’s rotating brownouts were triggered by the shutdown on Monday of one of the Sual power plant’s 647-MW units. - BusinessWorld