POWER retailer Manila Electric Company (Meralco) is increasing its generation charge by P0.327 kilowatt hour increase this month as a result of hike in power supplied by its own independent power producers.

But Meralco vice president and utility economics head Ivanna Dela Peña noted that the increase will only be 25 centavos per kWh due to the reduction in transmission charges amounting to 0.06 centavos and the deferred power purchase adjustment of P0.017 per kWh.

Sun.Star accepts donations for victims of Typhoon Ondoy

“Given these mitigating factors, customers will see a net increase of about P0.25 per kWh,” dela Peña said.

She explained that the cooler weather at this time of the year will also help reduce generation rate adjustment on the over-all bills of Meralco customers.

“The increase in generation charge was due to a number of factors including the lower dispatch of independent power producers following reduced consumption in the October supply month (September 26 to October 25, 2009) after the series of typhoons that hit Manila and other parts of Luzon caused massive power outages,” she said.

“Add to this is the prolonged power outages in some portions of the Meralco franchise area resulting from the trouble in one of the transformers in the Dolores Substation of the National Grid Corp. of the Philippines,” she added.

According to the official, the high cost of power purchase from National Power Corp. (Napocor) as well as the wholesale electricity spot market had been another factor that caused generation charge to increase.

Other factors that contributed further to generation charge adjustment includes the higher fuel cost and peso depreciation.

However, she said the generation charge of Meralco is within the P4.2286 per kWh level this month which is still lower than the previous month in particular the month of April which reached at P5.02 per kwh.

“In fact, the rate this month is still lower than the P4.26 per kWh generation charge in June and July 2009,” dela Peña said.

For his part, Meralco external communications manager Joe Zaldarriaga said that after a series of reductions in the generation charge for the past six months, "it is not surprising to expect that sooner or later, the rates will register an upward movement."

"As we have been explaining to our customers, the generation charge may vary from month to month depending on the cost of energy supplied by the power producers, and this recent adjustment merely reflects the interaction of various factors contributing to the effective cost of power generation,” Zaldarriaga said.

Meralco also maintained that generation increase could not be considered an income of the company since it is merely a pass through charge, which may go up or down depending on the cost of the energy that the power firm purchases from its suppliers.

Meralco is majority owned by telecommunications giant Philippine Long Distance Telephone Co., food and beverage conglomerate San Miguel Corp. and the Lopez Group. It has more than 4.6 million customers in its franchise area, majority of them are in Metro Manila. (MSN/Sunnex)