The Manila Electric Company (Meralco) announced today an upward adjustment of P0.1543 per kWh in the electricity rate this September, bringing the overall rate for a typical household to P11.7882 per kWh from the previous month’s P11.6339 per kWh.
For residential customers consuming 200 kWh, the adjustment is equivalent to an increase of around P31 in their total electricity bill.
Higher transmission charge more than offsets generation charge reduction
Driving this month’s overall rate adjustment is the P0.2913 per kWh increase in the transmission charge for residential customers due to higher ancillary service charges following the resumption of commercial operations of the Reserve Market on August 5, 2024.
Total ancillary service charges from the Reserve Market were double the charges from the National Grid Corporation of the Philippines’ (NGCP) Ancillary Service Procurement Agreements (ASPAs). The share of ancillary service charges to NGCP’s transmission rate rose to more than 50%.
This month’s higher transmission charge more than offset the reduction in the generation charge, which went down by P0.1547 per kWh.
Charges from Power Supply Agreements (PSAs), Independent Power Producers (IPPs), and the Wholesale Electricity Spot Market (WESM) all registered reductions.
The decrease in the generation charge was primarily driven by the Peso’s appreciation to its strongest level since December 2023, affecting 50% of PSA costs and 97% of IPP costs that were dollar denominated. This led to the P0.2371 per kWh and P0.0529 per kWh reductions in PSA and IPP charges, respectively.
WESM charges also decreased by P0.0514 per kWh. This already factored in the final of four installments of deferred May 2024 WESM costs earlier ordered by the Energy Regulatory Commission (ERC).
PSAs, WESM, and IPPs accounted for 46.2%, 27.3%, and 26.4% of Meralco’s total energy requirement for the period.
Meralco reiterated its earlier advisory that customers can expect increase in generation costs from First Gas – Sta. Rita and San Lorenzo next month following the ERC’s approval of the implementation of adjusted rates for the two suppliers.
As directed by the ERC, the Malampaya pricing under the new Gas Sale and Purchase Agreements (GSPAs) of the First Gas plants will be implemented starting September 2024 supply month, to be reflected in the October billing to customers.
In addition, the cost differential between the old and new GSPAs up to the August 2024 supply month will be recovered over 12 months beginning the October 2024 billing to customers.
Other charges
Meanwhile, taxes and other charges registered a P0.0177 per kWh net increase.
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 (FIT-All) 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.
Public urged to practice electrical safety
With the ongoing rainy season, Meralco reminded the public to continue observing electrical safety especially given the increased likelihood of flooding.
Some tips that customers can observe include turning off the main electrical power switch or circuit breaker in case of flooding and ensuring 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 channels of communication open and ready, and charge mobile phones, laptops, radios, and other communication gadgets especially during instances of severe weather disturbances.
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.