Households under Meralco franchise area to experience higher electricity bills this month
Households within the franchise coverage of power distributor Manila Electric Co. (Meralco) can expect an increase of P0.6436 per kilowatt-hour (kWh) in electricity bills this month.
Meralco stated that the increase, attributed to higher pass-through charges, raised the overall electricity rate to P12.0575 per kWh in June from last month’s P11.4139 per kWh.
This adjustment means an increase of around P129 for a typical household consuming 200 kWh a month.
The rate hike for this month was driven by an increase in generation charge of P0.3466 per kWh due to higher costs from the Wholesale Electricity Spot Market (WESM).
Meralco VP and head of corporate communications Joe Zaldarriaga explained at a press conference that “in the last supply month, we’ve seen tightness of supply coupled with high demand from the system. There was really pressure to increase WESM prices.”
WESM charges spiked by P1.5203 per kWh for June billing, attributed to tight supply conditions last month, with average demand rising by over 1,200 megawatts (MW).
Charges from independent power producers (IPPs) also saw an increase of P0.0224 per kWh, net of deferred generation costs, due to lower average IPP dispatch and the weak peso.
However, the higher generation charge was offset by a P0.2988 per kWh decrease in charges after Meralco and some power suppliers deferred the collection of portions of the generation cost this month.
Jose Ronald Valles, Meralco SVP and head of the regulatory management office, noted that “the increase… would have been higher, but Meralco took the initiative to cushion the impact of the higher pass-through costs on our customers with the help of some of our suppliers.”
Meralco, Quezon Power (Philippines) Ltd., San Buenaventura Power Ltd. Co. and South Premiere Power Corp. deferred the collection of around P500 million in generation costs, resulting in a P0.1313 per kWh reduction in the generation charge.
The deferred costs will be added to the electricity bills of consumers on a staggered basis over the next three months, the company stated.
The Energy Regulatory Commission has reportedly approved the measure.
Valles added that “We are still waiting for regulatory approval of our 400-MW interim power supply agreement (PSA) with Limay Power Inc., which could significantly reduce our WESM exposure and generation costs.”
WESM, IPPs, and PSAs accounted for 33 percent, 29 percent, and 38 percent, respectively, of Meralco’s total energy requirement.
On the other hand, the transmission charge for household consumers increased by P0.1450 per kWh as ancillary service charges went up.
Meralco’s distribution charge has remained unchanged since August 2022 when it was reduced by P0.0360 per kWh.
Last month, Meralco electricity rates went up by P0.4621 per kWh due to higher generation charges.
