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Meralco rate hike set, but lower than ERC estimate

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Manila Electric Co. (Meralco) on Friday confirmed higher power rates in December and January, but not as high as the Energy Regulatory Commission (ERC) estimated a day earlier.

Customers of Meralco can expect higher power rates after the company finishes paying off a P0.28 per kilowatt-hour refund and the company stops getting its electricity from San Miguel Corp., company spokesman Joe Zaldarriaga said.

Meralco announced on Friday an increase of P0.3297 per KWh for December, equivalent to an increase of around P66 for residential customers consuming 200 kWh.

The ERC said Thursday that electricity prices in the Meralco franchise area would go up by about P0.30 to P0.40 per kilowatt-hour, or an average increase of P80 per bill per 200 kWh, by January next year, but Meralco does not expect the full amount to be reflected by then.

Zaldarriaga said the P0.28 per KWh refund will end in December and will immediately have an impact on the January rates.

He said the suspension of Meralco’s 2019 power supply agreement with San Miguel would also likely raise electricity costs.

Zaldarriaga said other factors are also expected to have an impact on rates next month.

Meralco said the overall rate for a typical household to P10.2769 per kWh this December from the previous month’s P9.9472 per kWh.

Zaldarriaga said the increase is mainly due to the completion of a distribution-related refund equivalent to P0.4669 per kWh for residential customers.

He said lower generation charges mitigated the increase this month, which went down by P0.1942 to P6.7975 from P6.9917 per kWh in November.

Charges from Meralco’s power supply agreements went down by P0.2079 per kWh as the First Natgas-San Gabriel plant went back online on Oct. 15 coming from a scheduled maintenance outage from Oct. 1 to 14.

The peso appreciation, which affected 38 percent of PSA costs that are dollar-denominated, also contributed to the reduction. Meralco sourced the majority or 52 percent of its power requirement from the PSAs for the November supply month.

Meralco said the P1.3985 per kWh reduction in Wholesale Electricity Spot Market charges due to the improved supply situation in the Luzon grid also brought down the generation charge.

The average daily capacity on outage remained at the 3,900-MW level but the reduction in both peak and average demand in the November supply month resulted in fewer impositions of the secondary price cap, which was triggered only 21 percent of the time in November versus October’s 52 percent.

Meralco bought 7 percent of its supply from the WESM, the trading floor of electricity.

Meralco’s Independent Power Producer charges, on the other hand, went up by P0.0545 per kWh.

First Gas-Sta. Rita Module 10 was on scheduled outage from Nov. 4 to 11 and on Nov. 19 to 20, while Sta. Rita Module 40 was also on scheduled outage from Nov. 12 to 27.

The peso’s appreciation tempered the increase in the IPP rate, as 98 percent of IPP costs were dollar-denominated. Meralco secured 41 percent of its supply from the IPPs.

Meralco’s distribution charge, on the other hand, has not moved since the P0.0360 per kWh reduction for a typical residential customer beginning August 2022.

Transmission charges for residential customers increased by P0.0753 per kWh due to higher ancillary service charges of the National Grid Corporation of the Philippines.

Meanwhile, taxes and other charges registered a net decrease of P0.0183 per kWh mainly due to the absence of feed-in tariff allowance following the issuance of the ERC resolution suspending the collection of P0.0364 per kWh FIT-All rate for three months starting in December.

Meralco’s PSA with San Miguel was the subject of the recent 60-day temporary restraining order issued by the Court of Appeals.

SPPC, a subsidiary of San Miguel Corp., supplies 670 MW from the 1,200-MW Ilijan power plant in Batangas.


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