Electric bills to balloon this month

Pass-through charges to increase by P200-P400

Already saddled with erratic power supply, customers of Manila Electric Co. (Meralco) would also have to bear a hefty spike in their electric bill because of a surge in the utility’s power cost.

From a generation charge of P4.93 per kilowatt-hour in February, Meralco’s power cost went up to P6.76 per kilowatt-hour in March for an increase of P1.83 per kilowatt-hour.

This will redound to an increase of almost P400 for households consuming 200 kilowatt-hours of electricity per month and nearly P200 for those using 100 kilowatt-hours per month.

The generation charge is a mechanism to reflect the cost of power from Meralco’s various suppliers and since it is a pass-through charge, it would not affect the company’s revenues.

“This sharp and sudden increase in generation cost is mostly accounted for by the high prices in the Wholesale Electricity Spot Market [WESM], brought about by the shortage in electricity supply, as there were several plants which were either out due to preventive or emergency maintenance, or with de-rated capacity because of the El Niño phenomenon,” Meralco said in a statement.

Meralco’s generation charge has gone up since January after a number of power plants in Luzon bogged down one after the other for the aforementioned reasons.

The power supply deficiency was also aggravated by the increase in power demand because of the prolonged dry spell and extreme heat.

The country’s largest power distribution utility, Meralco services the electricity needs of Metro Manila and outlying provinces in Luzon, which has already been hit by several island-wide rotating brownouts because of the power shortages.

Mitigation measures
To help mitigate the financial impact of the increase on its customers, Meralco has asked the Energy Regulatory Commission (ERC) to lower by P0.45 per kilowatt-hour the increase in the generation charge for its March 2010 billing.

In its petition to the regulator, it said that in view of the substantial amount of the generation cost, it would not be able to promptly pay the cost of generation to its suppliers without immediately recovering such cost from its customers.

Nevertheless, Meralco added that it realizes that the impact of the resulting high generation charges, if immediately recovered, would place great financial burden on its customers.

To mitigate the effects of the abrupt increase in generation cost, Meralco proposed that instead of reflecting the actual generation charge of P6.76 per kilowatt-hour in its customers’ electricity bills, it be allowed to implement a lower generation charge of P6.32 per kilowatt-hour.

It also proposed that the balance of the generation cost be spread over a six-month period starting April 2010, representing a collection of around P0.07 per kilowatt-hour.

“Considering the pressing nature of the instant petition to shield the petitioner’s end-users from such abrupt increase in generation cost and to avoid any consequential financial prejudice to both petitioner and the consumers, it is therefore urgent that a provisional authority be immediately issued upon filing and pending hearing of the instant petition,” Meralco said.

Oil prices
Meanwhile, oil companies raised pump prices for the second time in as many weeks as world oil prices continued to rise.

The price hike was led by independent oil firms Phoenix Petroleum Philippines Inc., Seaoil Philippines Inc., Eastern Petroleum Corp. and Unioil Petroleum Philippines Inc., which separately announced an increase of P0.50 per liter for gasoline and P0.25 per liter for diesel and kerosene.

The price increase took effect 6 a.m. of Tuesday.

Two of the country’s “Big Three,” Petron Corp. and Chevron (formerly Caltex) Philippines Inc., also implemented a similar price adjustment

The country’s other major oil player, Pilipinas Shell Petroleum Corp., as well as other smaller oil firms, were yet to announce a similar adjustment as of press time.

But last week, most of the oil firms followed one another’s increase of P1 per liter for gasoline and P0.75 per liter for diesel and kerosene.

The oil companies attributed the increase to higher international petroleum product prices and market competition.

As of Tuesday, the average prices of imported unleaded gasoline were placed at $91 a barrel (from $87) and diesel at $87 a barrel (from $84) in February.

Data from the Department of Energy showed that as of February 23, prevailing prices in Metro Manila were recorded between P42.20 and P44.50 for unleaded gasoline, P32.75 and P35.30 for diesel and P40.40 and P46.75 for kerosene. –EUAN PAULO C. AÑONUEVO Reporter, Manila Times