Meralco rates up anew in August

Customers of the Manila Electric Company (Meralco) will have to pay more for electricity this month, as the firm on Monday announced an upward adjustment in its rates due to higher transmission charges.

In an advisory, Meralco said it will increase rates by P0.0327 per kilowatt-hour (kWh) in August, bringing the overall rate for a typical household to P11.6339 per kWh from P11.6012 per kWh in July. This translates to an increase of around P7 for residential customers consuming 200 kWh.

Meralco attributed the upward adjustment to the P0.1086 per kWh increase in transmission charges, on the back of higher charges of the grid operator for ancillary service which increased by more than 50% as charges for contingency and dispatchable reserves doubled.

This more than offset the P0.0503 per kWh reduction in generation charge, with charges from independent power products (IPPs) down by P0.2974 per kWh accounting for 33% of the Meralco’s total energy requirement.

Prices in the wholesale electricity spot market (WESM) — which accounted for 27% of Meralco’s requirement — were up by P0.5940 per kWh while charges from power supply agreements (PSAs), which accounted for 40%, also increased by P0.0421 per kWh, driven by higher-fuel related costs.

Meralco said generation costs from First Gas - Sta. Rita and San Lorenzo are set to increase, as these use gas from Malampaya which had its old Gas Sale and Purchase Agreement (GSPA) expire in July.

The old GSPA for both plants will continue to be applied, pending regulatory approval of the new GSPA.

“Once the new GSPAs are approved, this will certainly affect the generation charges of Sta. Rita and San Lorenzo,” Meralco vice president and head of corporate communications Joe Zaldarriaga said in the advisory.

The company is optimistic to hit a core net income of at least P40 billion in 2024, as it believes it can sustain the growth it recorded in the first quarter of the year.

Meralco constructs, operates, and maintains electric distribution systems in the cities and municipalities of Bulacan, Cavite, Metro Manila, and Rizal, as well as certain areas in the provinces of Batangas, Laguna, Pampanga, and Quezon.

The firm counts as subsidiaries and associates Vantage Energy Solutions and Management Inc. and MeridianX Inc., acting as retail electricity suppliers in Luzon and the Visayas. — RSJ, GMA Integrated News