Customers of the Manila Electric Company (Meralco) might face higher electricity bills this month of November due to an increase in the generation charge.
In an advisory on Tuesday, November 12, Meralco announced a rate increase of P0.4274 per kilowatt hour for this month (kWh), raising the overall electricity rate for a typical household to P11.8569 per kWh, up from last month’s P11.4295 per kWh.
For residential customers using 200 kWh, the adjustment will result in an increase of approximately P85 in their total electricity bill this month.
In a virtual briefing, Meralco Vice President and Head of Corporate Communications Joe Zaldarriaga attributed the increase to a higher generation charge, which rose by more P0.2884 per kWh.
Zaldarriaga mentioned that while power consumption typically decreases during the colder months, holiday activities and festive events could lead to higher energy usage.
Meralco Head of Utility Economics Larry Fernandez, who was also in the briefing, likewise attributed the increase to te peso’s poor performance against the dollar in October and November.
He added that many utilities necessary to Meralco operations are priced in dollars, such as fuel, The peso’s poor performance led to an increase in charges from Independent Power Producers and Power Supply Agreements.
When asked about potential price hikes in December for the Christmas season, Fernandez noted that all indicators remain stable, except for the US dollar. He also mentioned that power demand is expected to rise during the holiday season.
While the use of electric cooling appliances is less likely due to the cooler weather, Fernandez explained that the holiday season typically leads to higher economic activity, contributing to increased energy consumption.
Charges from Independent Power Producers (IPPs) and Power Supply Agreements (PSAs) increased by P0.9392 and P0.4295 per kWh, respectively, mainly due to the depreciation of the local currency.
The Philippine peso weakened by P2 against the US Dollar, affecting 98% of IPP costs and 49% of PSA costs that are dollar-denominated.
Additionally, payments for liquefied natural gas (LNG) terminal fees for the First Gas Sta. Rita and San Lorenzo plants contributed to the higher IPP charges.
Meanwhile, charges from the Wholesale Electricity Spot Market (WESM) rose by P0.0150 per kWh. Average demand in the Luzon grid increased by about 198 MW, while average capacity on outage also went up by 179 MW.
IPPs, PSAs, and WESM accounted for 24%, 47%, and 29%, respectively, of Meralco’s total energy requirement for the period. There was also an increase in transmission and other charges. (TCSP)
