HIGHER spot market prices will push up power generation charge this month, the Manila Electric Company (Meralco) said on Wednesday.
“Based on early, initial projections, there may be upward pressure on the generation charge for this month due to observed increase in WESM [Wholesale Electricity Spot Market] prices,” said Meralco spokesman and head of corporate communications Joe Zaldarriaga.
The utility firm is set to announce the power rates for the month on June 10. Even before last week’s red alerts, the Luzon grid was already experiencing tight supply conditions during the May supply month. An average capacity on outage remained at the 3,000 megawatt (MW) level.
The Luzon grid was placed on yellow alert on May 5 due to insufficient operating reserves and the secondary cap of P6.245 per kilowatt-hour (kWh) was triggered from May 4 to 7 and then again from May 20 to 22.
The secondary price cap is a price-mitigating mechanism designed to limit the persistent high market prices.
The triggering of the secondary price cap meant that WESM prices were persistently high during the month. Hence, the increase in WESM prices will tend to push up the generation charge for June. Generation charge makes up bulk of an electricity bill.
“But notably, as announced earlier last month, Meralco customers are still experiencing record low power rate levels, as last month’s overall rate was still lower than last year’s rate by P0.1548 per kWh. This was also the lowest rate for May since 2017,” commented Zaldarriaga.
Meralco, he added, continues to encourage its over 7 million customers to practice energy efficiency initiatives at home to help manage their consumption.
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