Electricity rates up this month

MANILA, Philippines — Rates of Manila Electric Co. (Meralco) slightly rose this month due to higher generation and transmission charges, and as it completed the refund of over-recovery in pass-through charges.

At a briefing yesterday, Meralco VP and head of corporate communications Joe Zaldarriaga said overall electricity rates for May rose by P0.1853 per kilowatt-hour, from P8.4067 per kwh to P8.5920 per kwh, which is equivalent to an increase of around P37 in the total bill of a residential customer consuming 200 kwh.

He, however, said this month’s overall rate is still lower than last year’s rate by P0.1548 per kwh and is also the lowest rate for May since 2017.

Zaldarriaga said Meralco has completed the refund over-recoveries in pass-through charges, which was ordered by the Energy Regulatory Commission (ERC) on Dec. 29, 2020 in the last billing month.

The impact to residential customers, from the months of January to April, was a refund of around P0.15 per kwh.

Meanwhile, the generation charge for this month slightly went up by P0.0104 per kwh from P4.5370 per kwh to P4.5474 per kwh.

This was due to an increase in charges from the Power Supply Agreements (PSAs) by P0.2541 per kwh due to low dispatch of San Gabriel because of the ongoing restriction of Malampaya natural gas supply.

“Wholesale Electricity Spot Market (WESM) charges also remained high due to tight supply conditions in the Luzon grid as capacity on outage stayed above 3,300 megawatts and Luzon peak demand in April still exceeded 10,400 MW,” Meralco said.

The company, however, said these were offset by lower charges from the Independent Power Producers (IPPs), which decreased by P0.1921 per kwh.

PSAs provided 52 percent of Meralco’s energy requirement while WESM share was down to seven percent this month. IPPs’ share this month was 41 percent.

Pushing up this month’s rate was the P0.0933 per kwh increase in transmission charge for residential customers due to completion of transmission refund coupled with higher ancillary service charges.

Taxes and other charges also registered a net increase of P0.0816 per kwh.

Tempering the rate increase this month was the continued Distribution Rate True-Up refund, which began in March, Zaldarriaga said.

The 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 represents the difference between the Actual Weighted Average Tariff and the ERC-approved Interim Average Rate for distribution-related charges for the period July 2015 to November 2020.

For residential customers, the refund rate is P0.2761 per kwh and appears in customer bills as a line item called “Dist True-Up.”

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 70 months, after these registered reductions in July 2015.

Meralco reiterated that it does not earn from the pass-through charges, such as the generation and transmission charges. Payment for the generation charge goes to the power suppliers, while payment for the transmission charge goes to the National Grid Corp. of the Philippines. Taxes and other public policy charges like the Universal Charges and the FIT-All are remitted to the government.

With the higher rate and rising temperatures, Meralco reiterated its call for energy efficiency, as historically, the summer season may bring an increase in residential electricity consumption by 10 to 40 percent versus average consumption during the cool months of January and February.