Meralco rates up again in December as generation costs stay high

MANILA, Philippines — Customers of Manila Electric Co. (Meralco) will see another month of higher power bills in December due to stubbornly high generation charges.

In a statement on Friday, the largest power distributor in the country said the overall rate for a typical household went up by P0.3143 per kWh this month. This is equivalent to an increase of around P63 in the total bill of a residential customer consuming 200 kWh.

Explaining the rate hike, Meralco said it continued to pay more for electricity it distributed to its franchise area. For this month, generation charge increased by P0.1997 per kWh.

The December generation charge already included the first of the four monthly installments covering the deferred costs from the November bill. To recall, Meralco also increased its overall rate in November after a maintenance shutdown of Malampaya facility raised generation costs to a level that would be too much of a burden to consumers if passed on to them all at once.

By sources, Meralco said costs of electricity from Power Supply Agreements (PSAs), where the company got 45.7% of energy it sold to consumers, increased by P0.2142 per kWh due to “higher international coal prices and lower dispatch of some PSAs.”

The more expensive power from PSAs and partial collection of deferred generation costs from last month offset a decline in prices from Independent Power Producers (IPPs) and the Wholesale Electricity Spot Market (WESM), which have a combined share of 54.3% to Meralco’s energy needs.

Meralco said IPPs lowered their prices by P0.1541 per kWh following the resumption of gas supply from Malampaya and improved dispatch of Sta. Rita and San Lorenzo plants. Meanwhile, energy from the spot market was down by P0.0649 per kWh amid “improved Luzon power supply situation” because of fewer plant outages and lower demand due to cold weather.

As it is, rising utility costs have been one of the major drivers of inflation this year. For most parts of the year, consumer price growth has been hovering above the government’s 2-4% target, making it difficult for some Filipinos to stay afloat as the pandemic drags on.