Higher generation charge triggers increase in Meralco September rates
After the combined rate reduction of P1.0121 in the past two months, the Manila Electric Company (Meralco) announced Friday an upward adjustment of P0.5006 per kWh in the electricity rate this September.
With this, overall rate for a typical household is P11.3997 per kWh this month from P10.8991 per kWh in August.
For residential customers consuming 200 kWh, the adjustment is equivalent to an increase of around P100 in their total electricity bill.
After three consecutive months of decreases totaling P1.2768 per kWh, the generation charge for September went up by P0.4323 to P6.8252 per kWh from P6.3929 per kWh last month due to higher costs from power supply agreements (PSAs) and Independent Power Producers (IPPs).
Charges from PSAs went up by P1.0362 per kWh because of higher fuel prices and the peso’s depreciation against the US dollar, which affected around 30 percent of PSA charges that are dollar denominated.
The same factors also resulted in a P0.4776 per kWh increase in IPP charges. The weakening of the peso against the US dollar affected around 98 percent of IPP costs which are dollar-denominated, while Malampaya gas supply restrictions led to increased use of more expensive alternative fuel by First Gas plants.
PSAs and IPPs accounted for 39 percent and 36 percent of Meralco’s total energy requirement for this period, respectively.
Wholesale Electricity Spot Market (WESM) charges, on the other hand, decreased by P0.5034 per kWh, mainly due to reductions in adjustments and other charges.
WESM’s share to Meralco’s requirement was 23 percent this month from 17 percent the previous month. Sual Power Inc. (SPI) terminated its 330-MW PSA with Meralco effective July 24, 2023, following the Court of Appeals decision on the Energy Regulatory Commission’s (ERC) denial of SPI’s motion for price adjustment. This prompted Meralco to partially source replacement power from the WESM.
Transmission charge for residential customers registered a slight reduction of P0.0081 per kWh. Starting the September billing period, the National Grid Corporation of the Philippines (NGCP) ceased collection of 3 percent national franchise tax, as directed by the ERC, but this was offset by higher ancillary service charges.
Meanwhile, universal charges also registered a reduction of P0.0239 per kWh following completion of the 12-month recovery of true-up rate under universal charge-missionary electrification. Taxes and other charges increased by P0.1003 per kWh.
Finally, collection of the Feed-In Tariff Allowance (FIT-All), at the rate of P0.0364 per kWh, remains suspended until otherwise lifted by the ERC.
Pass-through charges for generation and transmission are paid by Meralco to the power suppliers and the grid operator, respectively; while taxes, universal charges, and FIT-All are all remitted to the government.
Meralco’s distribution charge, meanwhile, has not moved since the P0.0360 per kWh reduction for a typical residential customer beginning August 2022. Meralco
