Manila Electric Co (Meralco) announced on Tuesday an increase in electricity rates of P0.2226 per kilowatt-hour (kWh) for February, bringing the overall rate for a typical household to P13.1734 per kWh.
The adjustment was led by higher transmission charges and a newly-approved subsidy for remote areas. Meralco vice-president and head of corporate communications Joe Zaldarriaga said residential customers consuming 200 kWh will see an increase of around P45 in their total monthly bill. The January rate stood at P12.9508 per kWh.
The utility said transmission charges for residential customers rose P0.1975 per kWh. This followed a significant increase in ancillary service charges from the reserve market incurred by the National Grid Corp. of the Philippines (NGCP) and higher power delivery service charges.
An additional P0.0770 per kWh increase stemmed from the universal charge for missionary electrification (UCME) approved by the Energy Regulatory Commission (ERC).
The regulator set a new rate of P0.2763, up from P0.1993, to subsidize electricity costs in remote areas. Other charges and taxes saw a net increase of P0.0554 per kWh.
A drop in the generation charge tempered the overall hike, falling by P0.1073 per kWh to P7.6398 per kWh on lower costs from independent power producers (IPPs).
Charges from Meralco IPPs fell by P0.8108 per kWh, which helped offset a P1.5682 per kWh increase in Wholesale Electricity Spot Market (WESM) charges and a P0.0483 per kWh rise from power supply agreements (PSAs).
WESM prices increased on tighter supply conditions in the Luzon grid, where average capacity on outage grew by approximately 973 megawatts.
Lower PSA dispatch, caused by planned maintenance shutdowns at Excellent Energy Resources Inc. and South Premiere Power Corp., also contributed to higher PSA costs. These plants returned to service by mid-January after preparing for the seasonal demand surge during the dry season.
IPPs, WESM and PSAs accounted for 24 percent, 10 percent and 66 percent of total energy requirements respectively.
Meralco said pass-through charges for generation and transmission are paid to suppliers and the grid operator, while taxes and universal charges go to the government. The company’s own distribution charge has remained unchanged since August 2022.
