Meralco to raise June generation rates

The Manila Electric Co. (Meralco) will increase its kilowatthour (kWh) rates by 51 centavos this month because of a rise in generation costs last May. Meralco said in a statement Tuesday its overall generation charge for June will rise to P5.53 from P5.02 per kWh last May. The generation cost last month is the basis for the generation charge this month. The generation charge accounts for about 60 percent of an electricity bill, said Mercalco. The increase was caused by a rise in generation charge from its suppliers, including the National Power Corp. (Napocor) and Successor Generating Companies selling through the transition supply contract, independent power producers (IPPs), and generators selling power through the Wholesale Electricity Spot Market (WESM). Merlco also noted that there was also a marked increase in electricity sport market prices in May. WESM had the highest increase as its average price rose by P1.89 per kWh while its energy share went up from 4 percent in the April supply month to 9 percent in May. IPPs and Napocor, meanwhile, contributed 46 percent and 45 percent, respectively, to Meralco’s total power purchases in May. Demand for power increased by more than 400 megawatts during the summer months. As a result, more electricity was needed during daytime peak hours when electricity from generators costs more. Napocor’s selling rate in May also increased because of a higher proportion of peak purchases. The average IPP cost also increased by 16.2 centavos per kWh – still the cheapest source for Meralco. The higher IPP costs were due to the higher cost of fuel and the depreciation of the peso exchange rate. With the rainy season, Meralco said that customers with large air-conditioning systems may see a decline in their consumption in the coming months, clarifying that power usage, and not just power prices, affect their customers’ bills. Meralco clarified that the generation charge does not go to the distribution company as it is used to pay its suppliers. – BC/VS, GMA News