Meralco raises electricity rate for second consecutive month this June

Customers of the Manila Electric Company (Meralco) would be compelled to tighten belts this month as the power distributor raised its electricity rate for the second straight month in June.

In an advisory, Meralco announced an increase of P0.4183 per kilowatt-hour (kWh) in its overall rate, bringing it to P11.9112 per kWh from P11.4929 per kWh in May.

The upward adjustment translates to an increase of about P84 in the total bill of a residential customer consuming 200 kWh.

The driver for the overall rate increase in June was the completion of the last distribution-related refund in May equivalent to P0.8656 per kWh for residential customers, the impact of which will be felt in the June bills, Meralco said.

To recall, the power distributor said that from March 2021 until May 2023, Meralco implemented four Distribution Rate True-Up (DRTU) adjustments totaling P48.3 billion which translated to about P1.8009 per kWh refund for residential customers.

“These refunds benefitted Meralco’s customers over the past two years as these helped temper increases in electricity bills at a time of financial distress and uncertainty for many,” said Meralco head of Regulatory Management Office Atty. Jose Ronald Valles.

Nevertheless, Meralco said the rate increase was tempered by the drop in generation charge, which declined down by P0.4195 per kWh from P7.6697 per kWh in May to P7.2502 per kWh in June “due to lower costs from Meralco’s Power Supply Agreements (PSAs) and Independent Power Producers (IPPs).

The company said that the generation charge no longer included the recovery of deferred generation cost for the March bills.

Meralco said that charges from PSAs and IPPs also decreased by P0.5871 and P0.5854 per kWh, respectively, “mainly due to improved average plant dispatch and lower coal prices.”

The decrease in PSAs and IPPs charges mitigated the P2.0187 per kWh increase in Wholesale Electricity Spot Market (WESM) charges due to tight supply conditions in Luzon as the peak demand in May reached 12,431 MW, the highest so far on record.

The grid was also placed under yellow and red alerts on May 8.

The share of PSAs and IPPs to Meralco’s energy requirements during the period went up to 50% and 38%, respectively. 

Meanwhile, WESM energy share was lower at 12%.

Meralco said transmission and other charges registered a net decrease of P0.0278 per kWh.

Collection of the Feed-In Tariff Allowance (FIT-All) remains suspended until the August billing month in accordance with the ERC resolution extending the collection suspension for another six months starting March 2023.

The company said that pass-through charges for generation and transmission are paid by Meralco to the power suppliers and the grid operator, respectively; while taxes, universal charges, and FIT-All are all remitted to the government.

Meralco said that the distribution charge has not moved since the P0.0360 per kWh reduction for a typical residential customer beginning August 2022. —VAL, GMA Integrated News