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Economy

Meralco rates rise on higher spot market prices

TYPICAL households in Metro Manila are set to see an increase of around P17 in their electricity bill this month as Manila Electric Co. (Meralco) announced a rise in the overall power rate due to higher spot market prices.

In a press release on Thursday, Meralco said that its overall rate climbed by P0.0872 per kilowatt-hour (kWh) to P8.4067 per kWh from last month’s P8.3195 per kWh.

The increase will translate into a P17.44 hike in the monthly bill of typical households, or those that consume 200 kWh a month. Households consuming 300 kWh, 400 kWh, and 500 kWh will see an increase of around P26, P35 and P44, respectively.

Meralco explained that the generation charge, which it remits to power suppliers, rose this month by 3.7% or P0.1621 to P4.5370 per kWh. The surge was caused by the P2.5991-per-kWh increase in the cost of power at the wholesale electricity spot market (WESM) because of tighter supply conditions in the Luzon grid.

“Peak demand in Luzon increased by almost 1,000 MW (megawatts) in March as a result of warmer temperature, while unavailable capacity from plant outages remained above 3,400 MW. WESM share is slightly down to 11% this month,” the firm said.

However, the increase in WESM charges were mitigated by the lower costs from independent power producers (IPPs) and power supply agreements (PSAs), Meralco said.

Charges from IPPs and PSAs went down by P0.2090 and P0.1371 per kWh, respectively, due to improved average plant dispatch and the peso’s appreciation.

PSA-sourced power accounted for 50% of Meralco’s energy requirements while IPPs were responsible for 39%.

Transmission charges decreased by P0.0856 per kWh, mainly caused by lower ancillary service charges, while taxes and other charges climbed by P0.0107 per kWh.

Meralco said that the collection of the environmental component of the universal charge at P0.0025 per kWh remains suspended in line with an order from the Energy Regulatory Commission (ERC).

The power firm said its distribution supply, and metering charges have remained unchanged for 69 months, after being reduced in July 2015.

Meralco does not earn from the pass-through charges, such as generation and transmission charges.

“Payment for the generation charge goes to the power suppliers, while payment for the transmission charge goes to the NGCP (National Grid Corp. of the Philippines),” it said.

Taxes and other public policy charges like the universal charges and the feed-in tariff allowance are remitted to the government, it added.

REFUNDS
In its statement, Meralco said that the April rate includes the ERC’s approved adjustments of the firm’s pass-through charges from January 2017 to December 2019.

Four months ago, the ERC ordered Meralco to refund over-recoveries in transmission and other charges over three months, and to collect an under-recovery in the generation rate for 24 months.

“Meralco implemented the ERC-approved adjustments starting January 2021. The impact to residential customers, from the months of January to April 2021, is a net refund of around P0.1150 per kWh,” the company said.

The distribution utility added that it is also implementing its distribution rate true-up refund, which began in March. The amount represents the difference between the actual weighted average tariff and the ERC-approved interim average rate for distribution-related charges from July 2015 to November 2020.

The refund rate is at P0.2761 per kWh, and is set to appear in consumers’ bills as a line item called “Dist True-Up.”

On Thursday, shares in Meralco at the local bourse shed 1.13% or P3.2 to close at P280.60 apiece.

Meralco’s controlling stakeholder, Beacon Electric Asset Holdings, Inc., is partly owned by PLDT, Inc.

Hastings Holdings, Inc., a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc., which has interest in BusinessWorld through the Philippine Star Group, which it controls. — Angelica Y. Yang

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