Electricity rates this month will increase by P0.0965 per kilowatt-hour (kWh) to P9.0036 per kWh mainly due to higher transmission charge, the Manila Electric Co. (Meralco) said Monday.
The increase is equivalent to an additional P19 in the total bill of a residential customer consuming 200 kWh, P29 for those consuming 300 kWh, P39 for 400 kWh and P48 for 500 kWh.
The August rate, however, is still lower than the pre-pandemic rate at P9.5674 in August 2019 and P10.2190 in August 2018. Meralco said this is proof that the series of competitive biddings by the utility firm resulted in lower electricity charges.
The transmission charge for residential customers increased by P0.1331 per kWh from P0.5992 in July to P0.7323 per kWh this month due to higher ancillary service charges, which accounted for about 36 percent of the National Grid Corp. of the Philippines’s (NGCP) total transmission charge.
Higher rates were tempered by the continued implementation of the Distribution Rate True-Up refund, which began in March 2021.
It can be recalled that the Energy Regulatory Commission (ERC) provisionally approved Meralco’s proposal to refund around P13.9 billion over a period of 24 months or until the amount is fully refunded. This amount represented the difference between the Actual Weighted Average Tariff and the Energy Regulatory Commission-approved Interim Average Rate for distribution-related charges for the period July 2015 to November 2020.
The refund rate for residential customers is at P0.2761 per kWh and appears in customer bills as a line item called “Dist True-Up.”
The generation charge for August, meanwhile, increased by P0.0615 per kWh from P4.8707 last month to P4.9322 per kWh this month.
Charges from the Independent Power Producers (IPPs) went up by P0.7389 per kWh. This can be partly attributed to the continued peso depreciation, as dollar-denominated charges account for around 95 percent of IPP costs. IPP charges also increased due to higher Malampaya natural gas prices, following its quarterly repricing to reflect increases in world crude oil prices.
The increase in IPP charges was mitigated by the decrease in charges of Power Supply Agreements (PSA) and the Wholesale Electricity Spot Market (WESM), which registered reductions of P0.0347 and P2.6903 per kWh, respectively. PSA charges decreased due to higher excess energy deliveries of AC Energy plants, which are priced at a discount.
WESM prices remained high in the first half of July due to tight supply conditions in Luzon, leading NGCP to declare a “yellow alert” on July 13. High WESM prices triggered the imposition of the secondary prices cap 6.48 percent of the time. However, WESM prices decreased in the second half, as power situation in the grid improved with cooler temperature and improved availability of generating plants.
For the said period, PSA, IPP, and WESM provided 53.0 percent, 40.8 percent, and 6.2 percent of Meralco’s energy requirements, respectively.
The slight increase in the generation charge was more than offset by lower subsidies, taxes, and other charges, which decreased by P0.0981 per kWh.
Meanwhile, collection of the Universal Charge-Environmental Charge amounting to P0.0025 per kWh remains suspended, as directed by the ERC.
Meralco’s distribution, supply, and metering charges, meanwhile, have remained unchanged for 73 months, after recording reductions in July 2015. It reiterated that it does not earn from the pass-through charges, such as the generation and transmission charges, as payments go to the power suppliers and the system operator, respectively. Meanwhile, taxes, universal charges and the FiT-All are remitted to the government.
Meralco customers who are unable to pay their electricity bills in areas under enhanced community quarantine (ECQ) and modified ECQ (MECQ) can heave a sigh of relief after the company announced that it has suspended disconnection activities in its franchise areas, namely, NCR until August 20, and in Laguna, Cavite, Rizal, and Lucena City in Quezon until August 15.
“Given the most recent announcement of the government placing the Cavite, Rizal, and Laguna region under MECQ from August 6 to 15, all disconnection activities in the said areas will also be suspended to help ease the burden of our customers with the needed relief and additional time to settle their bills,” said Ferdinand O. Geluz, Meralco FVP and chief commercial officer.
During heightened quarantine restrictions, demand for electricity is lower. Meralco could not say if power rates for the succeeding months will also be lower as a lot of factors are being considered.
“Typically, when demand goes down, there is generally a downward pressure on spot market prices. However, it would also depend on the supply, level outages of power plants. Hopefully, the level of outages can be managed like in the past few months and demand goes down like in the past ECQ, then we might see lower charges,” said Meralco Utility Economics Head Lawrence Fernandez during a briefing.