Meralco hikes power rate in September

Customers of the Manila Electric Company (Meralco) should expect higher bills as the power distributor announced a hike in its household electricity rate this month, following two straight months of rollbacks.

In an advisory, Meralco said it increased its power rate by P0.5006 per kilowatt-hour (kWh) for September, bringing the overall rate to P11.3997 per kWh from P10.8991 in August.

The upward adjustment could translate to an increase of about P100 in the total bill of a customer consuming 200 kWh.

Meralco attributed the increase in power rate to higher generation charge, which went up by P0.4323 to P6.8252 per kWh from P6.3929 per kWh in August “due to higher costs from Power Supply Agreements (PSAs) and Independent Power Producers (IPPs).”

This, as charges from PSAs rose by P1.0362 per kWh “because of higher fuel prices and the peso’s depreciation against the US dollar, which affected around 30% of PSA charges that are dollar denominated.”

The power distributor said the same factors also contributed to the P0.4776 per kWh increase in IPP charges.

Meralco added the weakening of the peso against the US dollar affected around 98% of IPP costs which are dollar-denominated.

The company said PSAs and IPPs accounted for 39% and 36%, respectively, of its total energy requirement for this period.

Meanwhile, Wholesale Electricity Spot Market (WESM) charges slipped by P0.5034 per kWh "mainly due to reductions in adjustments and other charges."

WESM’s share to Meralco’s requirement was 23% this month from 17% the previous month.

Meralco said Sual Power Inc. (SPI) terminated its 330-megawatt PSA with Meralco effective July 24, 2023, following the Court of Appeals decision on the Energy Regulatory Commission’s (ERC) denial of SPI’s motion for price adjustment.

“This prompted Meralco to partially source replacement power from the WESM,” the company said.

Transmission charge for residential customers, likewise, saw a reduction of P0.0081 per kWh.

Meralco added that starting the September billing period, the National Grid Corporation of the Philippines (NGCP) ceased collection of 3% national franchise tax, as directed by the ERC, “but this was offset by higher ancillary service charges.”

Universal charges also decreased by P0.0239 per kWh following completion of the 12-month recovery of true-up rate under universal charge-missionary electrification.

Meralco added that taxes and other charges increased by P0.1003 per kWh.

“Finally, collection of the Feed-In Tariff Allowance (FIT-All), at the rate of P0.0364 per kWh, remains suspended until otherwise lifted by the ERC,” it said.

The company said 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’s distribution charge, meanwhile, has not moved since the P0.0360 per kWh reduction for a typical residential customer beginning August 2022,” it said.—AOL, GMA Integrated News