Meralco bares slight increase in power rates

Manila Electric Co., the country’s biggest retailer of electricity, announced Friday a slight upward adjustment in rates for June.

The utility raised the electricity rate for a typical household by P0.0798 per kilowatt-hour to P8.6718 per kWh from last month’s P8.5920 per kWh. A residential customer consuming a monthly average of 200 kWh will experience an increase of around P16 in the total bill.

Meralco vice president and spokesman Joe Zaldarriaga attributed the increase in June rates mainly due to higher charges in the Wholesale Electricity Spot Market, the trading floor of electricity.

Zaldarriaga said this month’s overall rate is still lower than last year’s rate by P0.0534 per kWh and is also the lowest rate for June since 2018.

Meralco’s generation charge for June rose P0.0697 per kW to P4.6171 per kWh from P4.5474 per kWh in May..

WESM charges increased P1.6322 per kWh due to tight supply conditions in the Luzon grid. Meralco last month secured around six percent of its power supply requirement from the WES.

Demand in the grid increased 1,131 MW to 11,556 MW in May from 10,425 MW in April with the increase in temperature and economic activities.

The Luzon grid was placed on yellow alert on May 5, due to insufficient operating reserves as the average capacity on outage remained at the 3,000 MW level from 2,700 MW last year.

As a result, WESM prices remained high for extended periods, triggering the imposition of the secondary price cap on May 4-7 and then again on May 20-22.

Zaldarriaga said the increase this month was tempered by Meralco’s implementation of the Distribution Rate True-Up refund that began in March.

The ERC 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 amount 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.

For residential customers, the refund rate is P0.2761 per kWh and appears in customer bills as a line item called “Dist True-Up.”

Topics: ​Manila Electric Co. , Joe Zaldarriaga , Wholesale Electricity Spot Market
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