Power consumers of Manila Electric Company (Meralco) will experience significantly higher rates in July of P2.1496 per kilowatt hour mainly due to higher generation charge as power costs normalized following artificially low rates last month.
This followed a significant reduction in rates amounting to 1.9623 per kilowatt hour in June.
Meralco said in a statement Monday this brings the overall rate for a typical household to P11.6012 from previous month’s P9.4516 per kWh.
It said residential customers consuming an average of 200 kWh will have an equivalent increase of around P430 in their total electricity bill.
“We again appeal for the understanding of our customers over the delayed bills as we sought guidance from the ERC on the implementation of this month’s rate adjustment. Rest assured that Meralco will adjust the due dates to give our customers enough time to settle their bills,” Meralco Vice President and Head of Corporate Communications Joe R. Zaldarriaga said.
According to Meralco, the generation charge went up in July by P2.0021 per kWh as charges at the Wholesale Electricity Spot Market (WESM) returned to normal levels as a result of the Energy Regulatory Commission’s (ERC) directive to stagger the collection of the charges for the May supply month in four equal monthly installments until September 2024.
The directive is on top of the ERC’s approval for Meralco to stagger the collection of around P500 million in May generation costs until September 2024, following Meralco’s request, along with Quezon Power (Philippines) Ltd. (QPPL), San Buenaventura Power Ltd. Co. (SBPL), and South Premiere Power Corporation (SPPC) under its 2024 Emergency PSA (EPSA).
Meralco said that for the July billing, WESM charges were higher by P6.6370 per kWh, as charges not only normalized but also reflected the recovery of a portion of deferred WESM costs from the May supply month.
However, it said mitigating the increase was the reduction in spot market prices as average demand in the Luzon grid decreased by about 900 MW.
The secondary price cap was also triggered only 6.6 percent of the time for this supply month from previous month’s 19.3 percent.
Charges from Meralco’s Independent Power Producers (IPPs) also increased by P0.4392 per kWh due to higher fuel costs and lower average plant dispatch. San Lorenzo Module 50 was on forced outage for 13 days in June supply month.
Meralco said this month’s IPP rate similarly reflected the first collection of May 2024 deferred costs for QPPL.
Charges from Meralco’s Power Supply Agreements (PSAs) also went up by P0.3530 per kWh, as charges normalized and included the recovery of deferred costs for SBPL and SPPC’s 2024 EPSA.
WESM, IPPs, and PSAs accounted for 34 percent, 28 percent, and 38 percent of Meralco’s total energy requirement for the period.
On the other hand, the transmission charge went down by P0.1550 per kWh due to the absence of reserve market settlement charges that affected last month’s ancillary service charges.
Taxes and other charges meanwhile registered a net increase of P0.3025 per kWh.
This month’s rates included an adjustment in generation, transmission, system loss, and lifeline subsidy charges, under the ERC rules governing automatic cost adjustments and true-up mechanism for pass-through charges.
