NextGen Day

The Malampaya gas field was shut down for repair in February, and the Manila Electric Company (Meralco) announced on Friday that higher generation costs, as a result, will result in higher electricity bills this month.

The cost of electricity will rise to PHP11.4348 per kilowatt hour (kWh) in March, up PHP0.5453 from the PHP10.8895 per kWh rate in February.

This will result in a PHP109 increase in the electricity price for households using 200 kWh.

The generation charge increase for this month would have been much higher, but we took the initiative to lessen the impact on our customers’ bills by working with some of our suppliers to postpone the collection of some of their generation costs, according to Jose Ronald Valles, head of the regulatory management office at Meralco.

According to Valles, postponed expenditures totaling PHP1.1 billion contributed to this month’s generating rate reduction of around PHP0.40 per kWh.

This will be invoiced over the course of two months beginning in April, in accordance with plans made with the Energy Regulatory Commission.

Independent power producers (IPPs) rates, according to Meralco, increased by PHP0.5784 per kWh.

“To ensure supply continuity during the 15-day closure of the Malampaya facility, the First Gas-Sta. Rita and First Gas-San Lorenzo units had to run on more expensive alternative fuel. The maintenance outage of Quezon Power, which was planned from January 21 to February 19 to assure availability during the summer, also contributed to the increase, the statement stated.

According to Meralco, the weaker peso also contributed to this month’s hike in generation charges.

“As a result of an increase in demand in the Luzon system, wholesale electricity spot market (WESM) costs were higher by PHP1.4795 per kWh,” it was noted.

Charges from power supply agreements (PSAs), on the other hand, remained unchanged “due to the delay of collection of a portion of PSA expenses.”

The hike in electricity prices this month in Meralco franchise areas was also a result of higher transmission and other costs.

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