Lower demand from commercial and industrial segments pushed higher system loss of the Manila Electric Co. in the first quarter but the company said the level is still lower than the limit set by the Energy Regulatory Commission (ERC).
System loss is the unbilled electricity either due to pilferage or inefficient lines or the natural loss of power when it passes through different channels. An equivalent amount is charged to consumers.
As of the first quarter this year, Meralco’s system loss averaged at 6.14 percent, slightly higher than the 6.08 percent recorded as of end-2020 and end-2019’s 5.54 percent. ERC’s system loss cap is at 7 percent for private distribution utilities.
Lawrence Fernandez, Meralco vice president and head of utility economics department, said residential customers are served from secondary lines which have a higher possibility for system loss as they utilize lower voltage. This is compared to commercial and industrial customers which require higher voltage but have experienced lower consumption during the pandemic.
Meanwhile, Meralco said power rates in its franchise area will go up by P0.1853 per kilowatt hour (kWh) this month. The second consecutive upward rate adjustment will be equivalent to an increase of around P37 in the bill of a residential customer consuming 200 kWh monthly and brings overall power rates to P8.5920 per kWh from last month’s P8.4067 per kWh.
Meralco said the increase is tempered, as the company continues to implement distribution rate true-up refund which began last March. The company will return around P13.9 billion over a period of 24 months or until the amount is fully refunded equivalent to P0.2761 per kWh for residential customers .
Generation charge for May increased to P4.5474 per kWh from last month’s P4.5370 per kWh as charges from power supply agreements (PSAs) went up by P0.2541 per kWh due to low dispatch of natural gas-fired power plants as a result of the ongoing restriction of Malampaya natural gas supply.
Wholesale Electricity Spot Market (WESM) charges also remained high due to tight supply conditions in the Luzon grid as capacity on outage stayed above 3,300 megawatts (MW) and Luzon peak demand in April still exceeded 10,400 MW. The rates were offset by lower charges from independent power producers (IPPs) whose rates decreased by P0.1921 per kWh.
Transmission charge for residential customers increased by P0.0933 per kWh due to the completion of the transmission refund coupled with higher ancillary service charges as taxes and other charges also registered a net increase of P0.0816 per kWh. The collection of the universal charge-environmental charge amounting to P0.0025 per kWh remains suspended as directed by the ERC.
Meralco’s interim distribution rates comprised of distribution, supply and metering charges, the only bill component paid to the company remained at P1.381 per kWh for 70 months.
The company said WESM accounted for 7 percent of requirement; IPPs, 41 percent and; PSAs, 52 percent. – J. Macapagal
