Meralco hikes power rates in June

Manila Electric Co. (Meralco) on Friday announced a slight increase in its electricity rates in June due to the increase in the cost of power it sourced from the Wholesale Electricity Spot Market (WESM).

This is the third straight month that Meralco adjusted its rates upwardly.

In an advisory, the power distributor said it is increasing its household rate by P0.0798 per kilowatt-hour (/kWh), bringing the overall rate for the month to P8.6718/kWh from P8.5920/kWh in May.

The upward adjustment translates to an increase of around P16 in the total monthly bill of a residential customer consuming 200 kWh.

Nonetheless, Meralco said its June overall rate is still lower than last year’s rate by P0.0534 per kWh.

“This is also the lowest rate for June since 2018,” it said.

The distribution utility said that the increase for the month was tempered by continued implementation of the Distribution Rate True-Up refund, which began March 2021. 

To recall, the Energy Regulatory Commission provisionally approved Meralco’s proposal to refund around P13.9 billion over a period of 24 months or until the amount is fully refunded.

The 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. 

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 for June inched up to P4.6171/kWh, a slight increase of P0.0697/kWh from May’s P4.5474/kWh.

Meanwhile, WESM charges increased by P1.6322/kWh “due to tight supply conditions in the Luzon grid.”

The power distributor said the increase in temperature and economic activity caused the demand in the Luzon grid to increase by 1,131 megawatts (MW) from 10,425 MW in April to 11,556 MW in May.

The Luzon grid was placed on Yellow alert on May 5, due to insufficient operating reserves as average capacity on outage remained at the 3,000 MW level.

But compared to the same period last year, capacity on outage was around 2,700 MW. 

“As a result, WESM prices were persistently high for extended periods, triggering the imposition of the secondary price cap on May 4 to 7 and then again on May 20 to 22,” Meralco said.

The increase in WESM charges, however, was mitigated by the lower charges from Meralco’s Power Supply Agreements (PSAs) and Independent Power Producers (IPPs), which decreased by P0.0476/kWh and P0.0037/kWh, respectively, “due to improved average plant dispatch and Peso appreciation.”

Meralco said its PSAs and IPPs provided 52% and 42% of its energy requirement for the month, respectively. 

Meanwhile, the share of WESM further declined to 6%.

On the other hand, transmission charge, taxes, and other charges for residential customers also registered a slight increase of P0.0101/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 71 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. — RSJ, GMA News