Meralco: May rates decline as refund order takes effect

BY LENIE LECTURA – MAY 11, 2022
from Business Mirror

Electricity rates this month declined by P0.1200 per kWh (kilowatt hour) to P10.0630 per kWh from P10.1830 per kWh last month, mainly due to the implementation of the refund order of the Energy Regulatory Commission (ERC).

The slight reduction for the month is equivalent to a decrease of around P24 in the total bill of residential customers consuming 200 kWh, according to the Manila Electric Co. (Meralco).

Meralco Head of Regulatory Management Jose Ronald V. Valles said the immediate implementation of the ERC’s order more than offset the impact of the increase in the generation charge this month.

Generation charge increased to P6.2277/kwh from P5.8724/kwh last month.

“As a highly regulated entity, Meralco’s rates are constantly being reviewed to make sure they are fair and reasonable,” said Valles.

It can be recalled that the ERC directed Meralco to refund customers a total of P7.75 billion, which is equivalent to P0.47 per kWh for residential customers to be carried out this month. This appears as a separate line item in customers’ power bills.

This month’s generation charge also includes the second of three installments covering the deferred generation costs for the March bill and the first of three installments for the deferred generation costs for the April bill. These installments were equivalent to an add-on of around P0.20 per kWh in the generation charge.

Charges from Power Supply Agreements (PSAs) for this month went up by P0.8045, while charges from Independent Power Producers (IPPs) fell by P0.4319 per kWh.

The price of Malampaya natural gas increased by 10 percent starting this quarter, reflecting recent spikes in world crude oil prices.  Power suppliers that have pass-through adjustments in Malampaya fuel—namely, First Gas-Sta. Rita, First Gas-San Lorenzo, and First Natgas- San Gabriel—accounted for 36 percent of Meralco’s supply in April.  These suppliers’ charges were also affected by the peso’s depreciation and an increase in usage of more expensive liquid fuel resulting from the Malampaya consortium’s continued failure to provide adequate natural gas supply.

Charges from the Wholesale Electricity Spot Market (WESM), meanwhile, went down by P0.8664 per kWh as demand in the Luzon Grid decreased due to non-working holidays and cooler temperature in April.

PSAs, IPPs, and WESM accounted for 48 percent, 41 percent, and 11 percent, respectively, of Meralco’s energy requirement.

Meanwhile, Meralco said its franchise area did not experience any major power interruption during the May 9 National and Local Elections.

The distribution utility reported 35 isolated outage incidents, all of which were immediately addressed by field personnel that were strategically positioned across its franchise area.

“The power outages were all isolated cases and were immediately restored. We thank our crew, contractors, and customer care group for their round-the-clock assistance to the polling and canvassing centers and local government units,” said Meralco Spokesperson and Vice President for Corporate Communications Joe Zaldarriaga.

“We will continue to be on alert to respond to any distribution-related problem until the conclusion of the election process.”

Meralco also called on more participants to join the Interruptible Load Program (ILP), the Department of Energy’s voluntary, demand-side management program that taps on businesses to collectively reduce electricity drawn from the grid when power interruptions are imminent.

With commercial and industrial segments accounting for a huge part of Meralco’s customer base, cooperation and support of its big-load customers are crucial to the success of the ILP.

As of May 10, there are 121 companies with a combined de-loading capacity of 554 megawatts in Meralco’s franchise area.