Average electricity price in PHL 2nd highest in Asia–think tank

Meralco linemen repair a power cable in this BusinessMirror file photo.

THE country’s average electricity price for residential customers is second highest in Asia as of January this year, according to a Perth-based consulting firm that specializes in providing power market advisory services in the Asia-Pacific region.

Meanwhile, Meralco announced on Tuesday that power rates for August slightly went up by P0.0265 per kWh to P10.2190 per kWh as generation charge inched up during the July supply month.

Based on data presented by International Energy Consultants Managing Director and lead consultant Dr. John Morris, the top 5 countries with the highest power rates surveyed in Asia are Japan (P12.31 per kWh); Philippines (P8.96 per kWh); Singapore (P8.83 per kWh; Hong Kong (P6.53 per kWh); and Thailand (P6.23 per kWh).

“The price you pay is generally the second highest in Asia,” said Morris during a news conference held with Meralco (Manila Electric Co.) officials in Pasig City.

Morris and Meralco officials pointed out, however, that other countries included in the survey received subsidies from their governments. Electricity rates in the Philippines are not subsidized by the government.

Morris said government subsidies continued to make power rates artificially low in markets like Thailand, Indonesia, Malaysia, Korea and Taiwan. In these five countries about 41 percent of their tariffs are subsidized at around $800 billion. These subsidies are in the form of cash grants, subsidized fuel or deferred expenditure.

“Electricity tariff in Luzon will further go down should investment in new power generation be made to meet rapid demand growth, and competition at retail level is promoted such that wholesale electricity cost reductions are fully passed on to customers,” Morris noted.

Slight uptick

Meralco said on Tuesday that the slight increase in overall electricity rates this month will result in an upward adjustment of around P5 in the power bills of a typical household consuming 200 kWh.

Generation charge, which makes up bulk of the bill, increased to P5.3491 per kWh from P5.2651 per kWh.

The increase is the result of an P0.6554-per-kWh rise in the cost of power from power-supply agreements (PSAs) due to lower average plant dispatch and higher fuel prices. The share of PSA purchases to Meralco’s total requirement this month was 43 percent.

Meanwhile, charges from the Wholesale Electricity Spot Market (WESM) decreased by P1.1021 per kWh with the absence of yellow alerts in the Luzon grid this
month. Despite higher Malampaya natural gas prices as a result of the quarterly repricing to reflect recent movement of crude oil prices in the world market, the cost of power from independent power producers (IPPs) decreased by P0.1690 per kWh due to an improvement in average plant dispatch.

Power plants using Malampaya natural gas provided 58 percent of Meralco’s supply.

The shares of WESM and IPPs purchases to Meralco’s total requirement this month were 12 percent and 45 percent, respectively.

Transmission charge of residential customers decreased by P0.0803 per kWh due to lower National Grid Corp. of the Philippines (NGCP) Ancillary Service charges. Meanwhile, taxes and other charges went up by P0.0228 per kWh this month.

Meralco’s distribution, supply and metering charges, meanwhile, have remained unchanged for 37 months, after these registered reductions in July 2015. Meralco reiterated that it does not earn from the pass-through charges, such as the generation and transmission charges. Payment for the generation charge goes to the power suppliers, while payment for the transmission charge goes to the NGCP. Taxes and other public policy charges like the FIT-All rate are remitted to the government.


Image credits: Nonie Reyes


1 comment

  1. As usual, we would come up with a more possible budget, we would decrease interests in less important fixtures, and actually make the government listen to us and be reasonable enough to team up with meralco.

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