Corporate News & Analysis: Meralco Announces Lower October Electricity Bills

dsc01690Meralco (MER) announced lower October electricity bills this September on lower charges from the WESM (Wholesale Electricity Spot Market).  MER sources 16% of its power from the WESM.  Its charges fell by PHP1.4747 per kwh due to the drop in the peak demand in the Luzon grid by 300 MW.  This is most likely due to the colder weather in September compared to the El Nino-hit summer months.

Electricity bills have been declining for three months now.  The decline in WESM charges offset the increase in IPP (Independent Power Producers) charges of PHP0.1671 per kwh due to the peso’s weakness and higher coal prices.  MER sources 36% of its power from IPPs.  The short term decline in electricity bills bodes well for consumers.

The power generation sector sees rates declining in the long term as well as new power plants come on-line from 2016 to 2020.  In Luzon, there are FGEN’s Avion and San Gabriel combined cycle power plants from 2016 to 2017 and MER’s Subic coal-fired power plant in 2019.

There are also others nationwide coming on-line, and the decrease in rates in the long term prompts local power generation companies to search for overseas opportunities.  AP has a project in Indonesia, and EDC has its Chile and Indonesia geothermal project opportunities.

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