Meralco hikes electricity rate by P0.54/kWh

MANILA, Philippines  –  Manila Electric Company (Meralco) increased its electricity rate by P0.5453 per kilowatt hour for March, bringing the total monthly bill of a typical household to P11.4348 per kWh from P10.8895 per kWh in the previous month.

For residential customers consuming 200 kWh, the adjustment is equivalent to an increase of about P109 in their
Meralco bill for the month.

In a statement, Meralco said the rate increase was due to higher generation charge triggered by the shutdown of the Malampaya gas-to-power facility for maintenance on Feb 4 to 18.  The shutdown compelled First Gas-Sta. Rita and First Gas-San Loreanzo plants, major suppliers of Meralco, to operate using more expensive alternative fuel to ensure continuity of supply.

Generation charge, or the cost of purchased power from suppliers and which accounts for 55 percent of the total bill, went up by P0.4636 to P7.3790 from P6.9154 per kWh in the previous month.

This month’s generation charge increase would have been significantly higher at P0.87 per kWh but Meralco opted for a staggered implementation of the adjustment.  The remaining P0.40 per kWh generation charge, or a total of P1.1 billion, will be billed in April and May, as coordinated with the Energy Regulatory Commission (ERC), Meralco said.

“We took the initiative to cushion the impact (of the generation charge increase)  on the bills of our customers by coordinating with some of our suppliers to defer collection of portions of their generation costs,” Meralco head of regulatory management office Jose Ronald V. Valles said in a statement.

” At the end of the day, we have to help our consumers manage the cost so we really had to find a way to make…the overall cost of electricity less painful for them,” said Joe Zaldarriaga, Meralco head of corporate communications.

Also contributing to the increase were Quezon Power’s maintenance shutdown on  Jan 21 to Feb. 19 and the depreciation of the peso, which affected 98 percent of  independent power producers’ (IPPs) costs.

IPPs supplied 35 percent of Meralco’s total energy requirement for the period.

Wholesale Electricity Spot Market (WESM) charges were higher by P1.4795 per kWh, resulting from an increase in demand in the Luzon grid. Peak and average demand went up by 457 MW and 675 MW, respectively, while average capacity on outage remained at around 3,800 MW.

Meanwhile, charges from Power Supply Agreements (PSAs) remained generally flat, largely due to the deferral of
collection of a portion of PSA costs. PSAs covered the remaining 43 percent of Meralco’s total requirement in the last supply
month.

All other charges, including transmission charge and taxes, registered an increase of P0.0817 per kWh.

Collection of the P0.0364 Feed-In Tariff Allowance (FIT-All) remains suspended following the issuance of the ERC
Resolution extending the suspension for another six (6) months, beginning this March until the August billing month.