Weak peso, high coal price may affect electricity bills — Meralco


Electricity rates may rise in the succeeding billing periods due to the weakening peso and higher coal prices, the Manila Electric Co. (MERALCO) said.

Two factors may place Meralco’s generation costs under pressure in the next few months, Meralco Vice President and Utility Economics Head Larry Fernandez said.

“One is the depreciation of the peso, many of the inputs to generation cost are dollar denominated, so any depreciation of the peso can have an impact on the generation cost,” Fernandez said.

The company also noticed the increase of coal price that might affect generation charges as 37.1 percent of Meralco’s supply come from coal power plants.

On September 11, the peso-dollar exchange rate breached P47 to $1 and rose higher to P48 the day after, the weakest in seven years.

Meralco said that it is still difficult to determine the trend in the coming months as the company has yet to receive billings from power generators.

“We need to see if they will already compute the foreign exchange effect and the more updated coal prices in their bills to us,” Fernandez said. “But we are continuing to monitor the fuel prices and the foreign exchange rate.”

Fernandez said that there are already pressures for a slight increase in generation costs.

“I think the pressure is to keep it where it is,” he said.

Meralco announced a P0.0451 per kilowatt – hour (kWh) reduction in overall rates in September to P8.46 per kWh.