Meralco hikes power rates in September

Customers of the Manila Electric Company (Meralco) should brace for higher electricity bills in September as the power distributor announced Friday an upward adjustment in its power rates.

In an advisory, Meralco said it will implement an upward adjustment of P0.1055 per kilowatt-hour (kWh) in its electricity rates, bringing the overall household rate to P9.1091/kWh from August’s rate of P9.0036/kWh.

The power distributor attributed the rate to higher generation charge.

The upward adjustment is equivalent to an increase of around P21 in the total bill of a typical residential customer consuming 200 kWh.

Despite the rate increase, Meralco said that this month’s rate is still lower than the P10.0732/kWh registered in the same month in 2018.

“It also marks an 11% decrease from the P10.2647 rate registered in the same month a decade ago,” it said.

Meralco said that generation charge, which makes up about 55% of customers’ electricity bills, increased by P0.1117/kWh to P5.0439 from last month’s P4.9322.

Charges from the Power Supply Agreements (PSA) registered an increase of P0.2494/kWh, it added.

“The reduction in demand brought about by the re-imposition of enhanced community quarantine in Metro Manila and neighboring regions led to lower excess energy deliveries, which are priced at a discount, from South Premiere Power, San Miguel Energy, and AC Energy,” Meralco said.

“Despite the increase, PSAs remained Meralco’s lowest cost source of supply,” it added.

Independent Power Producers (IPP) charges, meanwhile, also increased by P0.0955/kWh due to lower average plant dispatch with the forced outage of Quezon Power (460 megawatts) from August 18 to 22 and scheduled outage of San Lorenzo Module 50 (265 MW) starting August 16.

Fuel costs of Sta. Rita and San Lorenzo, which is around 60% of IPPs’ total cost, also increased due to the use of more expensive alternative liquid fuel for their continued operation, following the ongoing restriction of gas supply from Malampaya, according to Meralco.

The cost of using liquid fuel is about twice that of using Malampaya gas, it said.

Meanwhile, lower demand in the Luzon grid also offset the impact of higher plant outages during the August supply month, Meralco said.

“As a result, Wholesale Electricity Spot Market (WESM) charges registered a reduction of P0.7504/kWh,” it said.

Meralco said charges from the WESM would have further decreased by P0.5646/kWh without the correction on the Net Settlement Surplus (NSS) component in the July 2021 WESM bill, and the generation charge adjustment would have been only at P0.0553/kWh.

For August supply, IPP, PSA, and WESM provided 36.8%, 53.2%, and 10.0% of Meralco’s energy requirements, respectively.

The power distributor, on the other hand, said the continued implementation of the Distribution Rate True-Up refund which began in March 2021 mitigated higher rates.

“The refund rate for residential customers is at P0.2761/kWh and appears in customers’ bills as a line item called ‘Dist True-Up’,” the power distributor said.

It can be recalled that the Energy Regulatory Commission (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.

The amount represented 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.

Meralco said transmission charge for residential customers is lower by P0.0520/kWh to P0.6803 from the P0.7323 registered in August, due to a decrease in Ancillary Service charges.

Likewise, subsidies, taxes, and other charges inched up by P0.0458/kWh during the month.

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

Meralco noted that distribution, supply, and metering charges, meanwhile, have remained unchanged for 74 months, after recording reductions in July 2015.

The company reiterated that it does not earn from the pass-through charges, such as the generation and transmission charges, as payments go to the power suppliers and the system operator, respectively.

Taxes, universal charges, and the FIT-All are remitted to the government, it said.

No Disconnection in MECQ Areas

Following the government’s announcement which placed the NCR, Bulacan, Cavite, Lucena City in Quezon and Rizal under modified enhanced community quarantine (MECQ), Meralco earlier announced that disconnection activities will remain suspended in the said areas until September 15 for NCR, and until the end of the month for Bulacan, Cavite, Rizal, and Lucena in Quezon.

“Given the most recent announcement of the Government placing NCR, Cavite, Rizal, and Laguna under MECQ, all disconnection activities in the said areas will also be suspended to help ease the burden of our customers with the needed relief and additional time to settle their bills,” said Ferdinand Geluz, Meralco first vice president and chief commercial officer. —KBK, GMA News