The Manila Electric Co. (Meralco) is undertaking two competitive selection processes (CSP) to ensure power supply in Metro Manila is sufficient during the summer months, the company said in its website.
The CSPs are for 180 megawatts (MW) of power that must be delivered from February 26 until Feb. 25, 2024 and another for 300 MW that should be provided from February 26 until July 25, 2023.
Lawrence Fernandez, Meralco vice president and head of utility economics department, said in a briefing last Friday the CSPs are “not yet in the point of bid submissions.”
Meralco also said power rates in Metro Manila will go down this February after three consecutive months of price hikes, mainly due to lower generation charges that offset the effects of the completion of distribution-related refunds.
The P0.0106 per kilowatt hour (kWh) downward rate adjustment brings overall power rates of Meralco to P10.89 from last month’s P10.90 per kWh.
This is equivalent to a decrease of around P125 in the total bill of residential customers consuming 200 kWh monthly.
Meralco said the generation charge went down by P0.21 to P6.92 from P7.13 per kWh the previous month due to lower costs from the Wholesale Electricity Spot Market (WESM) and independent power producers (IPPs) offsetting an increase in charges from power supply agreements (PSAs).
WESM charges decreased by P3.74 per kWh as the supply situation in the Luzon grid improved with less generation capacity on outage, lower demand and the absence of yellow alerts.
Charges from IPPs also went down by P0.2950 per kWh as natural gas-fired power plants reduced the use of more expensive alternative fuel and Malampaya gas’ lower prices due to the quarterly repricing. The continued appreciation of the Peso, which affected 95 percent of IPP costs that are dollar-denominated, also contributed to the reduction.
PSA charges increased by P0.8 per kWh due to lower average plant dispatch especially with the suspension of agreements with San Miguel Corp. subsidiaries’ power plants.
Meralco said reduction in the generation charge balanced the impact of the completion of the third of four distribution-related refunds, equivalent to P0.19 per kWh for residential customers and is no longer reflected in the customers’ electric bills starting February.
The remaining distribution-related refund, equivalent to P0.8656 per kWh for residential customers, continues to temper the monthly bills with the last refund set to be completed by May 2023.
Despite the drop in generation charges, all other charges, including transmission charge and taxes, registered a slight net increase of P0.0108 per kWh.
Collection of the feed-in-tariff allowance equivalent to P0.0364 per kWh remains suspended following the issuance of the Energy Regulatory Commission’s Resolution order halting its collection for three months from December 2022 to February 2023.
Distribution, supply and metering charges, which went down by P0.0360 per kWh in August 2022.
WESM accounted for 16 percent of total power requirements; IPPs, 37 percent and; PSAs, 47 percent. -Jed Macapagal
