Meralco rates slightly up in May

Meralco on Friday announced a slight increase in its rates in May due to the increase in the cost of power from its supply deals and Wholesale Electricity Spot Market (WESM), as well as the completion of the refund of over-recovery in pass-through charges.

In an advisory, Meralco said it is increasing its household rate by P0.1853 per kilowatt-hour(/kWh), bringing the overall rate for the month to P8.5920/kWh from P8.4067/kWh in April.

The upward adjustment is equivalent to an increase of around P37 in the total bill of a residential customer consuming 200 kWh.

Nonetheless, Meralco said its May overall rate is still lower than last year’s rate by P0.1548 per kWh.

“This is also the lowest rate for May since 2017,” it said.

The power distributor noted that it has completed the Energy Regulatory Commission-approved refund of over-recoveries in pass-through charges, “so the corresponding deduction for the refund will no longer appear beginning with the May bill.”

In an order released December 29, 2020, the ERC directed Meralco to refund P1.4 billion in over-recoveries in transmission and other charges. 

Meralco implemented the approved adjustments starting January 2021 and completed the refund of over-recoveries last April.

The impact to residential customers, from the months of January to April 2021, was a refund of around P0.15/kWh, it said.

“The increase this month was tempered, as Meralco continues the implementation of the Distribution Rate True-Up refund, which began in March 2021,” the company said.

The ERC provisionally approved Meralco’s proposal to refund around P13.9 billion over a period of 24 months or until the amount is fully refunded. 

“This amount represents the difference between the Actual Weighted Average Tariff and the ERC-approved Interim Average Rate for distribution-related charges for the period July 2015 to November 2020,” it said. 

For residential customers, the refund rate is P0.2761/kWh and appears in customer bills as a line item called “Dist True-Up”.

Meralco said generation charge in May inched up to P4.5474/kWh, a slight P0.0104/kWh increase from last month’s P4.5370/kWh.

Meanwhile, charges from the Power Supply Agreements (PSAs) increased by P0.2541/kWh “due to low dispatch of San Gabriel as a result of the ongoing restriction of Malampaya natural gas supply.”

WESM charges also remained high due to tight supply conditions in the Luzon grid as capacity on outage stayed above 3,300 MW and Luzon peak demand in April still exceeded 10,400 MW, Meralco said.

“However, these were offset by lower charges from the Independent Power Producers (IPPs), which decreased by P0.1921/kWh,” it added.

PSAs provided 52% of Meralco’s energy requirement while WESM share was down to 7% this month. 

IPPs share this month was 41%.

Meralco said its transmission charge for residential customers increased by P0.0933/kWh due to completion of transmission refund coupled with higher ancillary service charges.

Taxes and other charges also registered a net increase of P0.0816/kWh.

The collection of the Universal Charge-Environmental Charge amounting to P0.0025/kWh remains suspended, as directed by the ERC.

Meralco said that distribution, supply, and metering charges, meanwhile, have remained unchanged for 70 months, after these registered reductions in July 2015.

It reiterated that it does not earn from the pass-through charges, such as the generation and transmission charges.

“Payment for the generation charge goes to the power suppliers, while payment for the transmission charge goes to the NGCP. Taxes and other public policy charges like the Universal Charges and the FIT-All are remitted to the government,” it said. —KBK, GMA News