MANILA, Philippines — Customers of Manila Electric Co. (Meralco) will see higher bills in September after the company paid more for power that it distributed to its franchise area.
In a statement on Friday, the country’s largest power distributor said the overall electricity rate for a typical household inched up by P0.1055 per kWh to P9.1091 per kWh this month. That translates to a P21 increase in the total bill of a typical residential customer consuming 200 kWh.
Meralco said the increase was tempered by the “distribution rate true-up refund” that started in March and will be implemented for 24 months or until P13.9 billion is fully returned to customers. Explaining the rate hike, Meralco said generation charge, which makes up about 55% of customers’ electricity bills, increased by P0.1117 per kWh this month.
According to Meralco, prices of energy it bought from power supply agreements (PSAs), where the company sourced 53.2% of power it sold to customers, went up by P0.2494 per kWh due to “lower excess energy deliveries” as a result of weak demand due to fresh lockdowns. But since energy from PSAs was bought at pre-agreed prices, Meralco said PSAs remained its “lowest cost source of supply” despite higher charges.
Meanwhile, independent power suppliers charged Meralco more by P0.0955 per kWh due to “lower average plant dispatch” as a result of plant outages. IPPs have a smaller 36.8% share in Meralco’s supply.
Energy prices in the Wholesale Electricity Spot Market (WESM), where Meralco gets 10.0% of its power needs, fell by P0.7504 per kWh after lower demand in the Luzon grid amid strict lockdowns and cooler temperatures offset the impact of plant shutdowns.
At the same time, transmission charge for residential customers dropped by P0.0520 per kWh due to “a decrease in Ancillary Service charges.”
As it is, the rate hike would come at a difficult time for some Meralco customers in areas under strict lockdown. That said, Meralco announced it won’t cut unpaid power lines in areas under Modified Enhanced Community Quarantine (MECQ), the second strictest form of lockdown.
The National Capital Region as well as provinces of Bulacan, Cavite, Lucena City in Quezon and Rizal will be under MECQ until September 15 amid a resurgence in coronavirus cases fueled by the Delta variant.
“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,” Ferdinand Geluz, company FVP and chief commercial officer, said.