Manila Electric Co. said Friday power rates rose by P0.2353 per kilowatt-hour in July to P8.9071 per kWh from P8.6718 per kWh in June, on high charges in the Wholesale Electricity Spot Market.
Meralco said the new rate would be equivalent to an increase of around P47 in the monthly bill of a residential customer with an average consumption of 200 kWh.
The company said higher charges at the WESM, the trading floor of electricity, contributed largely to the increase in the generation rates this month.
Meralco vice president and head of utility economics Lawrence Fernandez said the largest contributor leading to the July rate adjustment was the persistently high rates at WESM.
“Between last month and this month, the charges went up by more than P2 from the spot market especially when we had yellow and red alerts,” Fernandez said.
Generation charges in July went up to P4.8707 per kWh, an increase of P0.2536 per kWh from last month’s P4.6171 per kWh. WESM charges remained high at P8.7424 per kWh amid tight supply condition in the Luzon grid, aggravated by the Malampaya natural gas supply restriction.
The Luzon grid was placed on red alert from May 31 to June 2 and on yellow alert on June 4 amid the unplanned shutdown of power plants, with 4,000 megawatts of power going offline.
Luzon’s demand reached 11,640 MW on May 28, the highest on record, which resulted in high WESM prices for extended periods, almost doubling the times when the secondary price cap was imposed during the June supply month.
Charges from Meralco’s independent power producer also increased P0.1929 per kWh. With reduced gas supply from Malampaya, affected plants resorted to the use of more expensive liquid fuel to continue operating and avoid more or longer brown outs.
IPP charges were also pushed up by the peso depreciation, as dollar-denominated charges accounted for 97 percent of IPP costs.
Meanwhile, the cost of power from power supply agreements decreased by P0.0521 per kWh.
“Our bilateral contracts helped to reduce the impact…In fact, our PSAs posted reduction. This is the reason why we are saying we try to get the best mix to obtain the least cost,” Meralco vice president and spokesman Joe Zaldarriaga said.
The WESM, IPPs and PSAs provided 7.8 percent, 39.5 percent, and 52.7 percent of Meralco’s energy requirement this month, respectively.
The rate increase was tempered by the continued implementation of its Distribution Rate True-Up refund, which began in March.
The Energy Regulatory Commission provisionally approved Meralco’s proposal to refund around P13.9 billion over a period of 24 months or until the amount is fully refunded. The refund 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.
