Meralco rate up by P0.0965/kWh this August

By Myrna M. Velasco – August 9, 2021, 2:06 PM
from Manila Bulletin

Customers of Manila Electric Company (Meralco) will need to shell out higher budget for their electric bills this month as the company’s overall tariff inched up by P0.0965 per kilowatt hour (kWh) to P9.0036 per kWh from last month’s P8.9071 per kWh.

The power firm said electricity rate hike in this billing cycle was “mainly as a result of higher transmission charge” due to the rise in procurement costs for ancillary services or the power reserves in operating the transmission system.

For those in the 200-kilowatt hour consumption base, the overall increase in their bills this August will be at P19, according to Meralco.

Relative to the upward adjustment on transmission charge, in particular, the utility firm specified that the pass-on rate to customers for this cost component had been up by P0.1331 per kWh to P0.7323 per kWh from the July level of P0.5992 per kWh – and that accounted for 36 percent of the overall billed rate this month.

The power firm stressed such upward adjustment was still “tempered by Meralco’s continued implementation of distribution rate true-up (adjustment) refund which began in March 2021” based on an order previously rendered by the Energy Regulatory Commission (ERC).

For the generation charge component in the rates, there was also a slight climb of P0.0615 per kWh to P4.9322 per kWh from the previous month’s P4.8707 per kWh.

On the other rate components, there had been decline in taxes and other charges at the scale of P0.0981 per kWh; while the collection of universal charge-environmental charge (UC-EC) amounting to P0.0025 per kWh remains suspended.

As emphasized by the utility firm, the charges of the independent power producers (IPPs) had inched up by P0.7389 per kWh; and that was “partly attributed to the continued peso depreciation,” with it expounding that “dollar-denominated charges account for around 95-percent of IPP costs.”

Meralco further pointed out “IPP charges also increased due to higher Malampaya natural gas prices, following its quarterly repricing to reflect increases in world crude oil prices.”

It noted though that the higher IPP costs had been mitigated by the reduction in the charges from its power supply agreements (PSAs) – which was down by P0.0347 per kWh; while charges in the Wholesale Electricity Spot Market (WESM) had also been lower by P2.6903 per kWh.

In terms of supply sourcing, the company procured 53-percent of the electricity it delivered to customers from its PSA suppliers; then 40.8-percent from its contracted IPPs and the balance of 6.2-percent from the power spot market.