Manila Electric Company (Meralco) bills this month will go up by P0.1761 per kilowatt hour (kWh), bringing the overall rate for a typical household to P11.4929 per kWh from the previous month’s P11.3168 per kWh.
For residential customers consuming 200 kWh, they should expect an equivalent increase of around P35 in their total electricity bill.
In a news briefing, Meralco said the generation charge increased to P7.6697 this month from P7.3295 per kWh in April due to higher Wholesale Electricity Spot Market (WESM) and Power Supply Agreement (PSA) costs.
This already includes the collection of the final installment of deferred charges, equivalent to around P0.20 per kWh. To recall, Meralco coordinated with its suppliers and the Energy Regulatory Commission (ERC) to stagger the collection of around P1.1 billion in generation costs in the March billing to cushion the impact of the rate increase to its customers.
WESM charges, meanwhile, increased by P1.7367 per kWh due to higher peak demand as the Luzon grid registered 12,235 megawatts (MW) on April 19, up by 732 MW than the peak recorded in March. With the tighter supply conditions, the secondary price cap was triggered 22.16 percent of the time in the April supply month versus 11.01 percent in the previous month. Meralco sourced 18 percent of its total requirement from the market during this period.
Charges from PSAs also went up by P0.9086 per kWh as the peso depreciation affected more than 26 percent of PSA costs that were dollar-denominated. Lower excess energy deliveries of some PSAs, which were priced at a discount, also contributed to the increase. This month’s PSA rate also reflected the impact of Meralco’s emergency PSAs with South Premiere Power Corp. and Therma Luzon Inc., which were implemented beginning March 26 and April 12, respectively. PSAs accounted for 47 percent of Meralco’s energy requirement.
However, the charges from Independent Power Producers (IPPs) reduced by P1.4014 per kWh mainly due to higher average plant dispatch. First Gas-Sta. Rita and San Lorenzo plants returned to normal operations from their respective scheduled maintenance outages last March. Malampaya natural gas prices of First Gas plants were also lower for the April supply month following its quarterly repricing to reflect recent trends in international crude oil prices. IPPs covered 35 percent of Meralco’s total energy requirement.
Transmission charge, meanwhile, was tempered by the P0.2455 per kWh reduction due to significantly lower ancillary service charges.
Other charges, comprising taxes, subsidies, and universal charges registered a net increase of P0.0814 per kWh. This already included the P0.0433 per kWh increase on the Universal Charge for Missionary Electrification (UC-ME) rate.
Collection of the Feed-In Tariff Allowance (FiT-All), meanwhile, remains suspended until the August billing month in accordance with the ERC resolution extending the collection suspension for another six months starting March 2023.
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, on the other hand, has not moved since the P0.0360 per kWh reduction for a typical residential customer in August 2022.
Meralco is set to complete this month the implementation of the last distribution-related refund, equivalent to P0.8656 per kWh for residential customers. The impact of this will be felt in the June billing period.
Meralco spokesperson Joe Zaldarriaga said an upward rate adjustment could be expected next month as demand is projected to spike to 13,125MW in the next two weeks.
“Yes, that is a given, as we mentioned both in terms of pricing and in terms of consumption, it will only taper off by July. For March to June, we expect an increase in consumption because all factors that come into play are surely present on those months,” he said.