By Sheldeen Joy Talavera, Reporter
HOUSEHOLDS SERVED by Manila Electric Co. (Meralco) will face higher power bills this month as rates go up by more than P2 per kilowatt-hour (kWh) due to a normalization in power costs.
In a statement on Monday, Meralco said the overall rate would increase by P2.1496 per kWh to P11.6012 per kWh in July from P9.4516 per kWh in June.
The power distributor attributed this hefty increase to the higher generation charge “as power costs normalized following artificially low rates last month.”
Households consuming 200 kWh will see their monthly bill go up by around P430.
Meanwhile, households consuming 300 kWh, 400 kWh, and 500 kWh would see an increase in their monthly bills by P645, P860, and P1,075, respectively.
Joe R. Zaldarriaga, Meralco’s vice-president and head of corporate communications, said at a briefing that the latest adjustment is “almost unchanged without the steep reduction last month.”
“Our power rates returned to normal that is why from P9.45 (per kWh), we are now back to the P11 range, to be exact, P11.60 (per kWh),” he said.
Driving this month’s increase was the generation charge, which climbed by P2.0021 per kWh as the charges from the Wholesale Electricity Spot Market (WESM) returned to the normal level and as Meralco started the collection of deferred costs.
To recall, the June electricity rate was supposed to be higher than May but was reduced by P1.9623 per kWh after the Energy Regulatory Commission (ERC) ordered the staggered collection of charges related to WESM purchases over a four-month period to soften the impact of the high generation rates.
Aside from the ERC’s order, Meralco also requested, along with Quezon Power (Philippines) Ltd., San Buenaventura Power Ltd. Co. (SBPL), and South Premiere Power Corp. (SPPC), to stagger the collection of around P500 million in May generation costs until September.
“We had a disclaimer as early as last month that in the month of July, anticipate that the increase will be significant as electricity prices will return to its previous level plus the deferred cost will be charged,” Mr. Zaldarriaga said in mixed Filipino and English.
For this month, WESM charges went up by P6.637 per kWh “as charges not only normalized but also reflected the recovery of a portion of deferred WESM costs from the May supply month.”
Meralco said, however, the increase was mitigated by the reduction in spot market prices as average demand in the Luzon grid went down by about 900 megawatts.
Charges from independent power producers (IPPs) rose by P0.4392 per kWh due to higher fuel costs and lower average plant dispatch.
“Charges from 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 (emergency power supply agreement),” Meralco said.
WESM, IPPs, and PSAs accounted for 34%, 28%, and 38% of the company’s total energy requirement for July.
Meanwhile, the transmission charge dropped by P0.1550 per kWh “due to the absence of reserve market settlement charges that affected last month’s ancillary service charges.”
In March, the ERC ordered the temporary suspension of the billing and settlement of amounts in the reserve market following the significant price increase reported for the month compared with February.
Taxes and other charges went up by 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,” Meralco said.
Distribution charge has remained unchanged at P0.0360 per kWh since August 2022.
Lawrence S. Fernandez, Meralco’s vice-president and head of utility economics, said that there is a possibility of lower rates in August as demand further declines.
“We saw in the spot market that because the rainy season has started, demand also went down and the reserve levels in the spot market have improved, so the price in the spot market also went down. So hopefully, this will continue, and this is reflected in the August generation charge,” Mr. Fernandez said in mixed Filipino and English.
Data from the Independent Electricity Market Operator of the Philippines showed that as of June 25, the initial average WESM price for the entire country went down by 25.2% to P6.15 per kWh.
Meanwhile, Mr. Zaldarriaga said this month’s bills would be delayed as Meralco sought the guidance from the ERC on the implementation of July rate adjustment.
“Rest assured that Meralco will adjust the due dates to give our customers enough time to settle their bills,” he said in a statement.
Meralco’s controlling stakeholder, Beacon Electric Asset Holdings, Inc., is partly owned by PLDT Inc.
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