Power rates in areas covered by Manila Electric Co. (Meralco) would likely increase this month driven by upward adjustments in some line items in the monthly power bill.
Joe Zaldarriaga, Meralco vice president and head of corporate communications, said generation, transmission and feed-in-tariff allowance (FIT-All) charges have all increased.
FIT-All is sourced from all electricity consumers who pay a premium on renewable energy projects that received incentives from the government.
“This (rate increase) is expected to be driven by the settlement costs in the reserve market and increase in FIT-All that will be reflected in the bills of customers this month,” Zaldarriaga said.
The Energy Regulatory Commission (ERC) recently ordered the partial lifting of the suspension on settlement amounts in the power reserve market which allowed the National Grid Corporation of the Philippines (NGCP) to start recovering costs for trading transactions made in the reserves market last March.
This is expected to translate to an increase of more than P0.10 per kilowatt hour (kWh) on the ancillary services component of the transmission charge in June.
Meralco said the ERC also recently approved the implementation of the new FIT-All starting this month that would result in an increase of P0.0474 per kWh.
On top of these charges, Zaldarriaga said there is an upward pressure in the generation charge given the tight supply conditions in the Luzon grid.
“We’ve experienced a series of red and yellow alerts in the last supply month, and as we know, these conditions affect generation costs particularly that in the Wholesale Electricity Spot Market (WESM),” Zaldarriaga said.
Meralco added the depreciation of the peso, which affects a big chunk of the costs of Independent Power Producers and Power Supply Agreements (PSA) is also expected to contribute to higher generation charge in June.
Last month, Meralco rates increased by P0.46 per kWh following a steep drop of almost P1 per kWh in April, largely due to the generation charge which was then driven by higher costs from the WESM.
Meanwhile, the Luzon Grid was again placed on yellow alert as of 8 a.m. yesterday as 22 power plant units were on either forced outage or de-rated with a total unavailable capacity of 2,692.8 MW.
Yellow alert was raised in the Luzon Grid yesterday from 1 p.m. to 4 p.m. and from 6 p.m. to 10 p.m. as 16 power plant units went down and six more with de-rated capacities.
Yellow alerts are issued when the level of power reserve in the grid is low and power interruptions are not yet imminent.
According to the NGCP, the alerts were raised as available capacity in the Luzon Grid was only 14,457 MW against a peak demand of 13,484 MW.
Meanwhile, the ERC said it has identified distribution utilities (DUs) and electric cooperatives (ECs) with over 40 percent exposure to the WESM and has started issuing provisional approvals for pending PSAs.
“That (issuance of PSA approvals) will help address pricing issues so that the DU customers will not be exposed to high WESM prices. Our difficulty is with those DUs and ECs with high WESM exposure that have not filed for approval of any PSAs with us. Customers in those areas are really left exposed until the DUs and ECs start locking in prices by contracting supply,” said ERC chair Monalisa Dimalanta in a separate message.
