Oil prices up, power rates down; water charges unchanged

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Consumers can look forward to a mixed bag of news on utilities.

Oil prices are up anew this week while power rates are down this month. Water rates are unchanged next month.

After last week’s mixed adjustments, oil prices are up anew effective today, June 9, as global crude costs jumped last week after reports of an unexpected fall in the May US jobless rates as well as the Organization of the Petroleum Exporting Countries’ plans to extend record production cuts.

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According to the Department of Energy (DOE), the latest average Manila price per liter of gasoline (RON95) is at P43.07, diesel at P32.23 and kerosene at P34.19.

Shell and Seaoil adjusted the per liter prices of gasoline upward by P1.75, diesel by P1.10 and kerosene by P1.

PTT increased the cost of gasoline by P1.75 per liter and diesel by P1.10 per liter.
As of May 27, year-to-date adjustments stood at a net decrease of P9.72 per liter for gasoline, P12.19 per liter for diesel and P15.64 per liter for kerosene.

Reuters reported that as of Friday last week, Brent crude futures settled at $42.30 a barrel, a 5.8 percent improvement while US West Texas Intermediate crude futures rose by 5.7 percent to $39.55 a barrel.

Both benchmarks were headed for a sixth week of gains, lifted by the output cuts and signs of improving fuel demand as countries ease lockdowns imposed to fight the new coronavirus outbreak.

Meanwhile, the Manila Electric Co. (Meralco) said June power rates will slightly go down by P0.0216 per kilowatt hour (kWh), attributed to lower generation charge as the company claimed force majeure on its power supply agreements (PSAs).

The third consecutive downward rate adjustment will be equivalent to a decrease of around P4 in the bill of a residential customer consuming 200 kWh monthly. It brings overall power rates to P8.7252 per kWh compared to last month’s P8.7468 per kWh.

The company said from P4.3848 per kWh last month, generation charge for June decreased to P4.3413 per kWh.

Meralco said due to the very significant reduction in power demand in its service area during the enhanced community quarantine and modified ECQ period, it invoked the force majeure (FM) provision in its PSAs for the duration of the lockdown, reducing fixed charges for generation capacity that would have been charged by suppliers.

For this month, FM claims totaled P614 million, equivalent to customer savings of P0.2208 per kWh. Without it, generation charge and the total rate would have increased by 18 centavos and 24 centavos, respectively, from last month’s rate.

For the past three months, the savings due to FM claims havereached around P1.6 billion.

Meralco said PSA charges decreased by P0.0613 per kWh while power from independent power producers (IPPs) decreased by P0.2334 per kWh due to higher average plant dispatch.

Charges from the wholesale electricity spot market (WESM) increased by P0.3132 per kWh due to tighter supply conditions in the Luzon grid mainly due to higher incidents of plant outages and slight increase in demand.

Other pass-through charges also registered an increase of P0.0219 per kWh but 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 59 months already.

The company said the total power requirements for the month, WESM accounted for 2.5 percent while PSAs and IPPs had shares of 50.4 percent and 47.1 percent, respectively.

Meanwhile, the Metropolitan Waterworks and Sewerage System-Regulatory Office (MWSS-RO) said there will be no water rates adjustments in Metro Manila next month as there will also be no foreign currency differential adjustment (FCDA) for the third quarter of the year.

FCDA is the tariff mechanism granted to utility companies to allow it to recover losses or give back gains arising from the fluctuating movements of the peso against other currencies.

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“The MWSS Board of Trustees has recently approved the recommendation of the MWSS-RO to retain the prevailing second quarter this upcoming quarter based on its evaluation of the FCDA proposals of the concessionaires,” Patrick Ty, the regulatory body’s chief regulator, said in a statement.

Manila Water Co. Inc. will continue to implement an FCDA of 1.69 percent of its 2020 average basic charge of P28.52 per cubic meter (cu. m.) or P0.48 per cu. m. as Maynilad Water Services Inc. will continue to apply an FCDA of negative 0.21 percent of its 2020 average basic charge of P36.24 per cu. m. or negative P0.08 per cu m.

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