Meralco power rates up in October

MANILA, Philippines — After five consecutive months of reduction in electricity rates, households and businesses in areas served by Manila Electric Co. (Meralco) will see higher power bills in October.

A typical household consuming 200 kilowatt hour (kWh) will see a P24 increase in electricity bills for October due to higher generation charges, the country’s largest power distributor said in a statement on Friday.

“This month’s increase in generation charge is mainly due to higher Wholesale Electricity Spot Market (WESM) charges, brought about by tightened supply conditions and higher demand,” the company explained.

Power supplies in Luzon fell short of rising demand in September after a forced outage of several power plants, including the Malampaya natural gas where 60% of the island’s electricity are sourced. 

As a result, WESM, where distributors like Meralco buys power, increased its prices to P32 per kWh, “the highest this year,” Meralco said. The higher rate inevitably is passed on to consumers.

Before this latest announcement, Meralco has consistently cut electricity costs since May when enhanced community quarantines (ECQ) were still enforced. “After being placed under MECQ in August, a rise in the Luzon demand was observed in September with the return to GCQ in Metro Manila and adjacent areas,” the firm said.

In total, Meralco is hiking overall charges by P0.1212 per kWh this month to P8.55 per kWh for typical households. Meanwhile, so-called lifeline customers consuming 100 per kWh or less are entitled to their one month waiver this month.
 
That order, which Meralco is still contesting before the Energy Regulatory Commission, was part of penalties slapped against the power distributor over a series of customer “bill shock” during ECQ. The Pangilinan-led firm vowed to implement the same, pending the decision from regulators.

Apart from generation charges, a pick-up in demand also hiked charges from power supply agreements (PSAs) by P0.1044 per kWh. PSAs account for 47% of Meralco’s energy requirements.

Meanwhile, other components of Meralco bills continued their decline in prices. For instance, cost of power purchased from independent power producers dropped by P0.0174 per kWh “mainly due to higher average plant dispatch.”

Transmission costs, or those paid to the National Grid Corporation of the Philippines to facilitate electricity transfer from generators to distributors, also went down P0.0161 per kWh this month. Collection of universal and environment charges worth P0.0025 per kWh also remains suspended.

On Friday, shares in Meralco fell 1.08% to cap the week at P273.6 each.