The Manila Electric Company (Meralco) announced today an upward adjustment of P2.1496 per kWh in the electricity rate this July mainly due to higher generation charge as power costs normalized following artificially low rates last month. This brings the overall rate for a typical household to P11.6012 from previous month’s P9.4516 per kWh.
For residential customers consuming 200 kWh, the adjustment is equivalent to an increase of around P430 in their total electricity bill.
Power rates normalize as WESM charges reflect actual cost; collection of deferred costs starts
Coming from a significant reduction last month, the generation charge went up this July by P2.0021 per kWh as WESM charges 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 (4) equal monthly installments until September 2024.
It can be recalled that the directive is aside from the ERC’s clearance 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).
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. 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% of the time for this supply month from previous month’s 19.3%.
Charges from 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. This month’s IPP rate similarly reflected the first collection of May 2024 deferred costs for QPPL.
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.
WESM, IPPs, and PSAs accounted for 34%, 28%, and 38% of Meralco’s total energy requirement for the period.
Transmission and other charges
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.
“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.
Pass-through charges for generation and transmission are paid to the power suppliers and the grid operator, respectively, while taxes, universal charges, and feed-in tariff allowance are all remitted to the government.
Meralco’s distribution charge, on the other hand, has not moved since the P0.0360 per kWh reduction for a typical residential customer in August 2022.
Meralco reminds customers to practice electrical safety this rainy season
Meralco reminded customers to continue observing electrical safety given the increased likelihood of flooding this rainy season.
Consumers should always turn off the main electrical power switch or circuit breaker in case of flooding and ensure that hands are dry when touching electrical appliances and facilities.
All electrical wires, connectors, and other wiring devices should also be kept completely dry, and if outlets or appliances are drenched, it’s best to have a licensed electrician check these before using.
Meralco also advised customers to keep all channels of communication open and ready, and charge mobile phones, laptops, radios, and other communication gadgets.
Customers can report power outages and other concerns through Meralco’s official social media accounts on Facebook (www.facebook.com/meralco) and X formerly Twitter (@meralco). They may also text their concerns to 0920-9716211 or 0917-5516211 or contact the Meralco Hotline at 16211 and 8631-1111.