The Manila Electric Co. (Meralco) on Monday hinted broadly of higher electricity costs in its franchise area as a consequence of charges having been deferred last month in keeping with directives from the Energy Regulatory Commission (ERC).
According to Meralco, the likelihood for a higher generation charge in the July billing period is high.
“To recall, the generation charge saw a reduction in June, after the ERC directed the staggered collection of Wholesale Electricity Spot Market charges over a four month period. Thus, from an artificially low level in June, we should expect WESM charges to normalize in the July generation charge,” said Lawrence Fernandez, Meralco vice president and head of utility economics department, in a message to reporters.
According to Fernandez, WESM charges should also be affected by the series of red alerts sustained by the Luzon grid at the start of the supply month in June. The advent of the wet months beginning July should help dampen energy demand thereafter.
But as WESM charges normalize, amortizing the deferred charges estimated at 77 centavos per kilowatt-hour add pressure for the power rates to rise in July, Fernandez .
The previous June, Meralco imposed a P1.9623 per kWh reduction in power rates as a result of the ERC mandate to implement the phased collection of the generation charge.
This resulted in a reduction of around P392 in the monthly bill of residential customers consuming 200 kWh and brought the overall power rate down to P9.4516 per kWh from the previous P11.4139 per kWh.
Prior to the ERC order on staggered WESM generation cost collection, Meralco was set to implement a P0.6436 per kWh increase in June equivalent to additional P129 in the total bill of residential customers consuming 200 kWh monthly.
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