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MANILA, Philippines - The good news is the economy has shown signs of improvement leading to an increase in electricity consumption. The bad news is this spike in demand is putting an upward pressure on power rates.
In a press conference, Oscar S. Reyes, Manila Electric Co. (Meralco) executive vice president and chief operating officer, said this is the scenario facing the utility's customers after "robust" sales growth in the first quarter.
Meralco registered a close to 10 percent increase in sales to 7,687 gigawatt-hours.
This allowed the company to register a P3.40 billion profit, up 58 percent from the same period last year.
Reyes said the company's sales were driven by a double-digit growth in demand from industrial customers as well as an increase in consumption among residential and commercial accounts.
However, the uptick in economic activity - coupled with the heat-induced demand as more consumers use cooling appliance - could push electricity rates up.
"The bias is upward pressure on prices. Unang-una demand seems to be high for April [and] probably continues in May. Pangalawa, it looks like the economy is growing robustly across the board. The margin for supply is also tightening some more because of the demand," said Manuel V. Pangilinan, Meralco president and chief executive officer.
Meralco's electricity rates averaged P9.35 per kilowatt-hour in the first quarter, up seven percent from P8.70 in the same period last year.
The generation charge - or the cost of power Meralco buys from suppliers -accounted for a lion's share of the increase in rates, rising 13 percent to P5.34 per kilowatt-hour from P4.74 last year.
Reyes said the higher generation charge, as well as the potential increase in the coming month, was the result of higher fuel prices this year.
"The rates were largely driven by generation charges. We don't expect any changes in distribution and transmission charges. The key is the generation charge, which is largely driven by cost of fuel," he said.
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