Wednesday, 6 May 2009

Meralco bills reduced further

Vol. XXII, No. 194
Wednesday, May 6, 2009 | MANILA, PHILIPPINES

BY JOSE BIMBO F. SANTOS | www.bworldonline.com

POWER BILLS of the Manila Electric Co. (Meralco) will go down this month by an average of 61.14 centavos per kilowatt-hour (kWh), due to a cut in generation charge passed on to its customers that adds to earlier announced reductions.


In a statement yesterday, Meralco said that average generation cost dropped by 59.70 centavos/kWh to P4.4235/kWh last month from P5.0205/kWh in March.

This reduction in generation charge will be on top of the earlier announced decrease in transmission charge of 16.5 centavos/kWh via an annual updating prescribed by the Energy Regulatory Commission’s Transmission Rate Adjustment.

Another reduction to be seen in Meralco bills this month will be from the refund from the distribution utility’s over-collections from currency exchange rate adjustments (CERA) which was ordered by the energy regulator to be increased from four centavos per kilowatt-hour starting March to 10.61 centavos/kWh starting this month.

According to Meralco, a residential customer consuming 100 kWh a month may see a P57.62 net reduction this month, while those consuming 200 kWh a month will have a P165.02 reduction.


"The generation cost of Meralco’s suppliers reflected a significant decrease, mainly triggered by a considerable reduction in fuel cost last April," the statement quoted Meralco vice-president Ivanna G. dela Peña as saying.


According to Meralco, the price of natural gas used by the First Gas plants declined by 30% from $10.69 per gigajoule (GJ) to $7.46 per GJ for last month’s supply. The decrease translated to a reduction in the generation charges of First Gas-operated Sta. Rita and San Lorenzo power stations. Sta. Rita, which contributed some 28.9% in Meralco’s energy mix, had a P1.75/kWh reduction, while San Lorenzo, with a 14.6% share, had a P1.11/kWh reduction.


Quezon Power, an independent power producer which supplied 12.8% of Meralco’s power requirement, also had a decrease of 70.90 centavos/kWh due to improved dispatch.


The average rate from the National Power Corp. (Napocor), which accounted for 36.4% of Meralco’s energy mix, also went down by 19.55 centavos/kWh.


Reductions from the Sta. Rita and San Lorenzo power stations, Quezon Power, and Napocor offset a P1.42/kWh increase in the price of the Wholesale Electricity Spot Market, which supplied 7.4% of Meralco’s total energy mix.


There is no guarantee that generation charge cuts will persist the following months, as other generators adjust rates monthly while First Gas does so quarterly, Lawrence S. Fernandez, Meralco utility economics manager, said in a phone interview.

The ERC ordered Meralco last February to give back to its customers a total of P3.9 billion in excess CERA charges it billed from June 2003-December 2006. ERC then ordered Meralco to refund four centavos per month, until the entire P3.9 billion is given back.


Last month, however, ERC ordered the CERA refund to be increased to 10.61 centavos/kWh starting this May, to offset the rate increase coming from the performance-based rate (PBR) pricing mechanism approved also last month.


ERC Executive Director Francis Saturnino C. Juan said in a separate interview that computations on the CERA refund, based on the originally approved four-centavo refund per month, showed that the refund may last for a year.


Mr. Juan, however, clarified that the duration of the refund will still depend on how much actual electricity consumption will be.


Meralco secured regulatory nod in April to implement its PBR rates this month, which would increase average distribution rates by 25.70 centavos/kWh to P1.227/kWh from the previous average of 96.57 centavos/kWh. The PBR mechanism involves a system of performance-based rewards and penalties designed to encourage utilities to become more efficient.


Adding the 59.70 centavos/kWh decrease in generation charge to the 1.44 centavos/kWh, derived by subtracting the sum of the CERA refund of 10.61 centavos/kWh and the reduced transmission charge of 16.53/kWh from the 25.70/kWh increase in distribution rate due to the PBR, Meralco customers will see an average decrease of 61.14 centavos/kWh this month.


Meralco’s franchise area covers 25 cities and 86 municipalities.

 

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