Meralco reckons power charges to slip due to wet season

With the onset of the rainy season, Manila Electric Co. is hoping that power generation rates will go down. Oscar Reyes, Meralco's chief operating officer, told reporters over the weekend that it would be "tough to say" what the power-generation charge will be for August. "We're hopeful that the rains continue [as it would] provide the hydro-generating plants the opportunity to offer more capacity to the system and hopefully put pressure on prices in the coming months," Reyes said. During the summer months, power prices shoot up because of the lower generation capacity from the hydro plants. Reyes said, "If the dams are able to go back up to their safety levels, then the higher dispatch of hydro plants should help the pricing situation." Meralco's generation charge went up by P0.058 per kilowatt hour (kWh) in July to P5.6546 per kWh from P5.5967 per kWh in June because of the higher electricity cost charged by its independent power producers. Cost of power sourced from National Power Corp. (Napocor) stood at P5.59 per kWh while that from the wholesale electricity spot market was at P7.90 per kWh. Joe Zaldarriaga, Meralco's external communications head, said the start of Napocor's wet season rates in July, which will be reflected on the consumers' bills this month, will temper electricity prices. Historically, Napocor's rate charged to distribution utilities goes down by P0.30 per kWh at the start of the wet season. The Philippines' electricity rate remains among the highest in the world. The country's total average effective rates went up by P1.48 per kWh last year to P7.2491 per kWh in December last year from around P5.77 in December 2008. Manuel Pangilinan, Meralco's chairman and CEO, admitted that there are no "quick fixes to the industry's ability to lower power rates in the short-term." Meralco is planning to put up a power plant that will generate 600 megawatts to help bring down power costs. —JE/OMG, GMANews.TV