Consumers of Manila Electric Co (Meralco) will see higher power rates in August, with an increase of P0.6268 per kilowatt-hour (kWh) due to higher pass-through charges.
Meralco vice president and head of corporate communications Joe Zaldarriaga said the overall rate for a typical household rose to P13.2703 per kWh from P12.6435 per kWh last month.
For residential customers using 200 kWh, the adjustment is equivalent to an increase of around P125 in their monthly electricity bill.
The generation charge, a key component of the bill, increased by P0.3749 per kWh, primarily driven by higher charges from Independent Power Producers (IPPs) and the Wholesale Electricity Spot Market (WESM).
Meralco vice president and head of utility economics Lawrence Fernandez said charges from IPPs rose by P0.9476 per kWh. This was caused by the nearly P2 depreciation of the local currency against the US dollar, its weakest level since the start of the year. About 99 percent of IPP costs are dollar-denominated.
“There was a huge depreciation of the peso versus the dollar. There was a sharp depreciation from P56 per US dollar from the previous month to P58 per US dollar this month,” Fernandez said. “Because many of the costs of generation plants are dollar-denominated, such as their fuel usage, the peso equivalent of their costs has increased.”
IPPs also had a lower average plant dispatch due to scheduled maintenance. This included First Gas-Sta. Rita from June 30 to July 9 and First Gas-San Lorenzo from July 10 to July 14.
Rates for First Gas’ 500 MW San Lorenzo natural gas plant went up by P0.8570 per kWh to P9.0790 per kWh, while the 1,000 MW Sta. Rita gas plant’s rates jumped by P0.8981 per kWh to P9.5235 per kWh.
WESM charges also increased by P0.4582 per kWh due to an almost 400 MW increase in average capacity on outage in the Luzon grid last month.
Zaldarriaga noted that a P0.2604 per kWh reduction in charges from power supply agreements (PSAs) helped temper the higher IPP and WESM charges. This reduction was a result of lower coal and liquefied natural gas prices and improved average PSA dispatch.
IPPs, WESM and PSAs accounted for 25 percent, 7 percent and 68 percent, respectively, of Meralco’s total energy requirement for the period.
Zaldarriaga said the transmission charge, another pass-through component of the electricity bill, also contributed to the higher August rate with an increase of P0.1270 per kWh.
This increase was due to the National Grid Corporation of the Philippines’ higher maximum allowable revenue (MAR) and the collection of its under-recovery for 2016 to 2022, as approved by the Energy Regulatory Commission (ERC).
Other charges, including taxes, also registered a total increase of P0.1249 per kWh.
Pass-through charges for generation and transmission are paid by Meralco to power suppliers and the grid operator, respectively. Taxes, universal charges and feed-in tariff allowance are all remitted to the government.
Meralco reiterated that its distribution charge has not changed since a P0.0360 per kWh reduction for a typical residential customer in August 2022.
Customers also continue to benefit from the ongoing implementation of a distribution-related true-up adjustment, equivalent to a reduction of P0.2024 per kWh for residential customers.
