Meralco rolls back power rates in May due to ERC refund order

The Manila Electric Company (Meralco) on Wednesday announced a rollback in its electricity rate for May, snapping a two-month trend of upward adjustments, thanks to the Energy Regulatory Commission’s (ERC) order for the power distributor to refund around P7.8 billion in excess collections.

According to Meralco, the overall rate for a typical household went down by 12 centavos to P10.0630 per kilowatt-hour (/kWh) from P10.1830/kWh in April.

The power rate rollback translates to a decrease of around P24 in the total bill of residential customers consuming 200 kWh, P36 for those consuming 300 kWh, P48 for 400 kWh consumption, and a reduction of P60 for those consuming 500 kWh.

The power distributor said the overall rate reduction was mainly due to the ERC order to Meralco to refund a total of P7.8 billion following the validation of Meralco’s 3rd Regulatory Period tariffs for the period July 2011 to June 2015.

The refund of distribution-related charges is equivalent to P0.4669/kWh for residential customers.

This will appear as a separate line item in customers’ power bills, Meralco said.

“As a highly regulated entity, Meralco’s rates are constantly being reviewed to make sure they are fair and reasonable,” said Atty. Jose Ronald Valles, Meralco head of Regulatory Management.

“The immediate implementation of the ERC’s order more than offset the impact of the increase of the generation charge this month, benefitting Meralco customers,” added Valles.

Meralco said its generation charge for May went up by P0.3553 to P6.2277/kWh from the P5.8724/kWh registered the previous month.

The power distributor said that charges from Power Supply Agreements (PSAs) for this month went up by P0.8045, while charges from Independent Power Producers (IPPs) decreased by P0.4319/kWh.

Meralco also said the price of Malampaya natural gas increased by 10% starting in the second quarter, reflecting recent spikes in world crude oil prices.

Power suppliers that have pass-through adjustments in Malampaya fuel —namely, First Gas-Sta. Rita, First Gas-San Lorenzo, and First Natgas- San Gabriel— accounted for 36% of Meralco’s supply in April, it said.

These suppliers’ charges were also affected by the peso’s depreciation and an increase in usage of more expensive liquid fuel resulting from the Malampaya consortium’s continued failure to provide adequate natural gas supply, according to Meralco.

The company noted that May’s generation charge also includes the second of three installments covering the deferred generation costs for the March bill and the first of three installments for the deferred generation costs for the April bill.

These installments were equivalent to an add-on of around P0.20 per kWh in the generation charge, Meralco said.

Charges from the Wholesale Electricity Spot Market (WESM), meanwhile, went down by P0.8664/kWh as demand in the Luzon Grid decreased due to non-working holidays and cooler temperature in April.

PSAs, IPPs, and WESM accounted for 48%, 41%, and 11%, respectively, of Meralco’s energy requirement.

On the other hand, transmission charge, taxes, and other charges for residential customers had a slight decrease of P0.0084/kWh.

The collection of P0.0025/kWh representing the Universal Charge-Environmental Charge remains suspended as ordered by the ERC.

Meralco reiterated that it only earns from distribution, supply, and metering charges, which have remained unchanged since the reduction in July 2015.

The company added that pass-through charges from generation and transmission are paid to the power suppliers and the system operator, respectively, while taxes, universal charges, and Feed-in Tariff Allowance (FIT-All) are all remitted to the government.—AOL, GMA News