Meralco hikes power rate by 42 centavos for October

Customers of the Manila Electric Company (Meralco) should tighten their belts further after the company announced an upward adjustment in its household electricity rate for this month.

This is the second time that Meralco hikes its power rate, following two consecutive months of rollbacks.

In an advisory on Wednesday, the power distribution utility said it increased its household electricity rate by 42.01 centavos per kilowatt hour (kWh) in October, bringing the overall rate to P11.8198 per kWh from P11.3997 per kWh in September.

The power rate hike could translate to an increase of P84 in the total bill of typical household consuming 200 kWh.

Meralco attributed the increase in October power rate to higher generation charges.

In particular, the company said the generation charge this month went up by 30.15 centavos to P7.1267 per kWh from P6.8252 per kWh last month “due to higher charges from Independent Power Producers (IPPs) and Power Supply Agreements (PSAs).”

This, as charges from IPPs increased by 45.99 centavos per kWh mainly due to higher cost of fuel utilized by the First Gas plants. 

Meanwhile, charges from PSAs also went up by 16.58 centavos per kWh, partly because of the forced shutdown of the 420-megawatt (MW) First NatGas-San Gabriel power plant from September 18 to 24 due to gas supply restrictions.

Meralco said lower coal prices abated the increase in PSA charges.

“Beginning August 26, 2023, Meralco implemented a second emergency power supply agreement (PSA) with South Premiere Power Corp. covering 330-MW baseload supply to replace the terminated PSA with Sual Power Inc,” it said.

IPPs and PSAs accounted for 35% and 47%, respectively, of Meralco’s total energy requirement for the September supply month. 

Charges from the Wholesale Electricity Spot Market (WESM) slightly increased by 5.25 centavos per kWh mainly due to adjustments.

“The supply situation in the Luzon grid improved last September as average demand and average capacity on outage were both lower, by around 165 MW and 315 MW, respectively,” Meralco said.

The power distributor said it sourced 18% of its total energy requirement from WESM for the period.

The transmission charge for residential customers also increased by 2.64 centavos per kWh due to higher ancillary service charges. 

“Because of the higher generation and transmission charges, taxes and other charges subsequently registered a net increase of 6.61 centavos per kWh,” it said.

“Universal charges also registered a 2.61 centavos per kWh increase after the Energy Regulatory Commission (ERC) approved a higher Universal Charge for Missionary Electrification (UC-ME). The UC-ME went up from 19.77 centavos to 22.38 centavos per kWh,” it added.

Collection of the Feed-In Tariff Allowance (FIT-All), at the rate of 3.64 centavos per kWh, remains suspended as directed by the ERC.

“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,” the company said.

Meralco said its distribution charge has not moved since the 3.60-centavo per kWh reduction for a typical residential customer beginning August 2022. —KBK, GMA Integrated News