MANILA Electric Co. (Meralco) is likely to record higher power generation charge next month due to an observed rise in the rates at the wholesale electricity spot market (WESM), an official of the distribution utility said on Tuesday.
An increased generation charge may point to higher power rates.
“Based on early, initial projections, there may be [a] higher generation charge for the month of April 2021 due to observed increase in WESM prices,” Meralco Vice President and Head of Corporate Communications Joe R. Zaldarriaga told BusinessWorld on Viber.
This comes around two weeks after the market operator of the WESM noted an increase in spot market prices, which averaged at P4.23 per kilowatt-hour (kWh) in early March. The increase was attributed to a “gradual surge in demand” as the economy continued to recover.
Meralco previously said that the generation charge for March stood at P4.3749 per kilowatt-hour (kWh), P0.0403 lower than February’s P4.4152 per kWh.
Mr. Zaldarriaga said that this month’s daily load-weighted average price (LWAP) in Luzon, where Meralco’s franchise area is located, was higher compared with the level in February.
“Daily Luzon LWAP reached P8/kWh during the week of March 1 and P9/kWh during the week of March 15. In comparison, the daily LWAP was below P3/kWh for most of February,” he said.
He added that Luzon’s peak demand increased by over 900 megawatts this month due to warmer temperatures and “large capacities on outage persisted.”
Typical households, or those that consumed 200 kWh, saw a P72 drop in their power bills in March, as the overall power rate stood at P8.3195 per kilowatt-hour kWh. The current rate was P0.3598 per kWh lower than the February level.
Meralco previously said that March’s rate reduction was mainly caused by the firm’s P13.89-billion distribution rate true-up refund, which was implemented this month.
The refund was in line with the Energy Regulatory Commission’s directive to Meralco in reimbursing over-recoveries based on the company’s actual weighted average tariff charges from July 2015 to November 2020. The amount will be returned to customers over a two-year period or until it has been fully refunded.
Shares of Meralco in the local bourse were unchanged at P270 apiece on Tuesday.
Meralco’s controlling stakeholder, Beacon Electric Asset Holdings, Inc., is partly owned by PLDT Inc.
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