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Meralco hikes power rate by 62 centavos in January


Customers of the Manila Electric Company (Meralco) shall brace for higher electricity bills this month as the power distributor hiked its power rate amid higher generation cost.

In an advisory, Meralco said it raised its overall rate for a typical household by 62.32 centavos per kilowatt-hour (kWh) to P10.9001 per kWh in January from P10.2769 per kWh in December last year.

The upward rate adjustment translates to an increase of around P125 in the total bill of a residential customer consuming 200 kWh.

The power distributor said higher generation charge and the completion of a distribution-related refund drove the rate increase.

In particular, Meralco said generation charge rose by 33.16 centavos to P7.1291 per kWh from P6.7975 per kWh in the previous month.

Likewise, charges from the Independent Power Producers (IPPs) went up by 40.70 centavos per kWh mainly due to the increased use of more expensive alternative fuel by First Gas Sta. Rita and San Lorenzo as a result of insufficient supply of Malampaya natural gas.

However, the peso’s appreciation, which affected 97% of IPP costs that are dollar-denominated, mitigated a further increase in power rates, according to Meralco.

IPPs provided 46% of Meralco’s energy requirement for the December supply month.

Wholesale Electricity Spot Market (WESM) charges, meanwhile, increased by 68.08 centavos per kWh, as the increase in average generation capacity on outage more than offset the decrease in power demand in the Luzon grid.

Due to the tight supply conditions, the grid was placed under Yellow Alert for three days during the December supply month and persistently high spot prices triggered the imposition of the secondary price cap 61% of the time, compared to 21% in November, Meralco said.

WESM energy share inched up to 9% this month from 7% the previous month.

The suspension of the Power Supply Agreement (PSA) with South Premiere Power Corporation (SPPC) starting December 7, 2022 for 670-megawatt baseload supply following the implementation of a Court of Appeals Temporary Restraining Order prompted Meralco to partially source replacement power from WESM.

To shield customers from exposure to volatile WESM prices, Meralco on December 15, 2022 executed an Emergency Power Supply Agreement (EPSA) with GNPower Dinginin Ltd. Effective until January 25, 2023, the EPSA covers 300-MW baseload capacity and partially replaced the capacity under the suspended PSA with SPPC. 

Meralco said it was constrained to source the remaining 370-MW from WESM following the lack or withdrawal of offers for emergency supply from other power generation companies.

Charges from PSAs, meanwhile, went down by 27.10 centavos per kWh due to higher share of excess energy deliveries, which are priced at a discount, and the appreciation of the peso against the dollar.

Around 36% of PSA costs are dollar-denominated.

PSAs provided 45% Meralco’s total energy requirement for the period.

“Further contributing to this month’s overall rate increase is the completion of a distribution-related refund equivalent to P0.2761 per kWh for residential customers,” Meralco said.

Nonetheless, the two ongoing refunds totaling P1.0579 per kWh for residential customers are still being implemented by Meralco and continue to temper customers’ monthly bills.

These refunds are expected to be completed by January 2023 and May 2023, and the impact will be felt in the succeeding billing periods — February 2023 and June 2023, respectively, the company said.

Meralco’s distribution charge, on the other hand, has not moved since the 3.60 centavos per kWh reduction for a typical residential customer starting August 2022.

Transmission charge for residential customers decreased by 3.14 centavos per kWh due to lower Ancillary Service charges.

Taxes and other charges registered an upward adjustment of 4.69 centavos per kWh.

Collection of the Feed-In Tariff Allowance (FIT-All) remains suspended following the issuance of the Energy Regulatory Commission’s Resolution halting the collection of 3.64 centavos per kWh FIT-All rate for three months from December 2022 to February 2023.

Pass-through charges for generation and transmission are paid to the power suppliers and the grid operator, respectively, while taxes, universal charges, and Feed-In Tariff Allowance (FIT-All) are all remitted to the government, Meralco said. —KBK, GMA Integrated News