Meralco rates up this month

By Richmond Mercurio – October 12, 2023 | 12:00am
from The Philippine Star

This picture shows Meralco’s electric meter.

MANILA, Philippines — Rates of Manila Electric Co. (Meralco) are up for the second straight month this month as a result of higher generation and transmission charges.

Meralco said overall electricity rate for a typical household went up by P0.4201 per kilowatt-hour to P11.8198 this month from P11.3997 per kWh in September.

The upward adjustment is equivalent to a rise of around P84 in the total electricity bill of residential customers consuming 200 kWh, P126 for those consuming 300 kWh, P168 for 400 kWh and P210 for 500 kWh.

“The main driver, just like before, is that the bulk of the increase comes from generation charge. There’s also a slight adjustment for transmission, and taxes also follow the increase in generation charge,” Meralco vice president and head of corporate communications Joe Zaldarriaga said.

For October, Meralco’s generation charge increased by P0.3015 to P7.1267 per kWh from P6.8252 last month due to higher charges from independent power producers (IPPs) and power supply agreements (PSAs).

Meralco said charges from IPPs, which accounted for 35 percent of its total energy requirement for the September supply month, went up by P0.4599 per kWh mainly due to higher cost of fuel utilized by the 1,000-megawatt First Gas-Sta. Rita and 500-MW First Gas-San Lorenzo power plants as they switched to more expensive alternative fuel to ensure supply continuity.

PSA charges, which accounted for 47 percent of Meralco’s total energy requirement, likewise jumped by P0.1658 per kWh.

Charges from the Wholesale Electricity Spot Market (WESM) also saw a slight upward adjustment of P0.0525 per kWh even as the supply situation in the Luzon grid improved in September.

Meralco sourced 18 percent of its total energy requirement from WESM for the period in review.

On top of the increase in generation charge, which accounts for more than half of the electric rate, Meralco said the transmission charge for residential customers also rose by P0.0264 per kWh due to higher ancillary service charges.

As a result of the higher generation and transmission charges, taxes and other charges subsequently registered a net increase of P0.0661 per kWh.

Universal charges also registered a P0.0261 per kWh hike after the Energy Regulatory Commission (ERC) approved a higher Universal Charge for Missionary Electrification or UCME, which went up from P0.1977 to P0.2238 per kWh.

The collection of the feed-in tariff allowance (FIT-All), at the rate of P0.0364 per kWh remains suspended, as directed by the ERC.

Pass-through charges for generation and transmission are paid by Meralco to the power suppliers and the grid operator, respectively, while taxes, universal charges and FIT-All are remitted to the government.

Meralco’s distribution charge, meanwhile, has not moved since the P0.0360 per kWh reduction for a typical residential customer beginning August 2022.

For next month, Zaldarriaga said it is still too early to tell what the likely trend in prices will be.

“We need to wait and know first the pricing in the market, depending on the October supply month and what will be the price on those we have bilateral contracts with,” Zaldarriaga said.

“But hopefully, despite slight increases in electricity prices, consumption is more steady. So, at least in terms of the consumption pattern this ‘ber’ months, consumption of consumers is much lower compared to the summer months,” he said.