Meralco rates likely up this month

MANILA, Philippines — Indications point to higher electricity rates for Manila Electric Co. (Meralco) this January, its third consecutive month of increase, according to an official of the power distributor.

“Likely up,” Meralco vice president and head of utility economics department Lawrence Fernandez told The STAR over the weekend.

“Even though foreign exchange improved, which would help manage the dollar-denominated portions of generators’ charges, there continued to be pressure on Wholesale Electricity Spot Market (WESM) prices to remain elevated last December, as the reductions in peak and average demand were more than offset by the increase in capacity on outage,” he said.

Fernandez said the supply month saw the grid being placed under several yellow alerts, thereby experiencing more days with the imposition of the secondary price cap, compared to the November supply month.

Meralco last month started sourcing an additional 670 megawatts from the WESM following the suspension of its fixed price power supply agreement (PSA) with San Miguel Global Power’s South Premiere Power Corp. (SPPC) due to temporary restraining order issued by the Court of Appeals.

SPPC officially ceased supplying Meralco under its PSA last Dec. 7.

The power distributor, however, was able to secure an emergency power supply deal with the joint venture of the Aboitiz and Ayala groups to lessen its exposure to volatile spot market prices.

The emergency PSA started on Dec. 15 and will last until Jan. 25, 2023.

“Besides this, the DRTU-1 refund will have been completed in December, so that this deduction will no longer appear on January bills,” Fernandez said.

Distribution rate true-up one – or DRTU-1 – was among the refunds for residential customers that tempered their monthly bills.

DRTU-1 was expected to be fully refunded last month, while two others are expected to be completed this month and in May, the impact of which will subsequently be felt in the succeeding billing periods.

Meralco is the largest electric power distribution company and the biggest private sector utility in the country.

The company provides electric service within its franchise coverage and has a consolidated customer count of 7.6 million as of end-September 2022.

Meralco rates went up for the second consecutive month in December, with overall rate for a typical household rising by P0.3297 per kilowatt-hour to P10.2769 per kWh from the previous month’s P9.9472 per kWh.

The overall rate increase in December was attributed to the completion of a distribution-related refund equivalent to P0.4669 per kWh for residential customers, which offset a reduction in the generation charge of P0.19 per kWh.