Meralco rates up by P0.1761 per kWh in May billing

On top of the double whammy of rotational brownouts and scorching heat, consumers of Manila Electric Company (Meralco) will be distressed with additional financial  burden as its rates will go up by P0.1761 per kilowatt hour (kWh) in this May billing.

For roughly 70-percent of the utility firm’s more than seven million customers that are in the 200-kWh usage band, the increase in their bills will be P35, and those in the 300kWh consumption level will experience P53 hike in their bills. The higher rate at P88 are for those with 500 kWh usage.

With this month’s upward cost adjustment, the overall tariff to be passed on by Meralco will be at P11.4929 per kWh from the previous month’s P11.3168 per kWh.

The generation charge component of the rate, according to Meralco, had gone up to P7.6697 in the May billing cycle versus last month’s P7.3295 per kWh – mainly due to uptick in charges for capacities sourced from the Wholesale Electricity Spot Market (WESM) as well as those from power supply agreements.

This billing month’s cost uptrend, it added, had integrated the remaining P0.20 per kWh that had been part of the P1.1 billion worth of staggered pass-on charges which accrued during the February 4-18 shutdown of the Malampaya gas production facility.

Relative to the other cost components in the rates, it was emphasized that the estimated rate hike would have been higher without the ‘tempering factor’ precipitated by the P0.2455 per kWh reduction in the transmission charge “due to significantly lower ancillary service charges.”

Conversely, it was specified that taxes, subsidies, and universal charges registered net increase of P0.0814 per kWh – and that was inclusive of the P0.0433 per kWh increase on the universal charge for missionary electrification (UC-ME) as earlier ordered by the Energy Regulatory Commission.

Primarily for the WESM charges, Meralco conveyed that this climbed by P1.7367 per kWh “due to higher peak demand as the Luzon grid registered 12,235 MW on April 19,” – that was an escalation of 732 MW compared to the peak posted in March.

“With the tighter supply conditions, the secondary price cap was triggered 22.16-percent of the time in the April supply month versus 11.01-percent in the previous month,” the utility firm noted.

Supply sourced from Meralco’s PSAs had likewise been higher by P0.9086 per kWh, partly due to the impact of the depreciation of the local currency’s value versus the US dollar; while capacities delivered from the contracted independent power producers (IPPs) posted significant cost decline of P1.4014 per kWh.

“This month’s PSA rate also reflected the impact of Meralco’s emergency PSAs with South Premiere Power Corp. and Therma Luzon Inc. which were implemented beginning March 26 and April 12, respectively,” the company said.

It qualified that the lower charges from the IPPs had been “mainly due to higher average plant dispatch. First Gas-Sta. Rita and San Lorenzo plants returned to normal operations from their respective scheduled maintenance outages last March. Malampaya natural gas prices of First Gas plants were also lower for the April supply month following its quarterly repricing to reflect.”

Bulk of supply procured by the company  last month had been from PSAs at 47-percent; then 35-percent from contracted IPPs; and the balance of 18-percent from the spot market.