Customers of the Manila Electric Company (Meralco) can expect higher electric bills this month as the energy retailer increased its household rate on the back of higher production costs caused by limited power supplies.
In an advisory on Thursday, Meralco said that energy rates would go up by P0.64 per kilowatt-hour (kWh) in June.
For a typical household, the Meralco power bill will go up from P11.4139 per kWh last month to P12.0575 per kWh this month.
The adjustment would mean that the total amount the households that use 200 kWh of energy would pay for their electricity bill will go up by about P129.
The production charge went up by P0.3466 per kWh on the back of higher costs from the Wholesale Electricity Spot Market (WESM), which mainly caused the rate increase.
“The increase in the generation charge this month would have been higher but Meralco took the initiative to cushion the impact of the higher pass-through costs to our customers with the help from some of our suppliers which deferred the collection of portions of their generation costs,” Meralco senior vice president and head of Regulatory Management Office Atty. Jose Ronald Valles said.
To lessen the effect of these higher costs, Meralco put off collecting about P500 million in generation costs with the help of some suppliers such as Quezon Power (Philippines) Ltd., San Buenaventura Power Ltd. Co. (SBPL), and South Premiere Power Corporation (SPPC). This caused this month’s generation charge to go down by P0.1313 per kWh.
The power distributor said the deferred collection will instead be billed on a staggered basis over the next three months, as cleared by the Energy Regulatory Commission (ERC).
“We are still waiting for regulatory approval of our 400-megawatt (MW) interim power supply agreement (PSA) with Limay Power Inc. which could significantly reduce our WESM exposure and generation costs,” Valles said.
Higher fees from Independent Power Producers (IPPs) and higher transmission fees for residential customers are two other things that led to the price increase.
Also, starting in June 2024, new fees have been put in place, such as the Feed-in Tariff Allowance (FIT-All) rate of P0.0838 per kWh.
Meralco said that taxes and other fees caused the net price of kWh to go up by 10.46 centavos.
The power distributor also said that generation and transmission pass-through charges are paid to the power providers and the grid operator, respectively. Taxes, universal charges, and FIT-All are all sent to the government.
There has been no change in Meralco’s distribution charge since August 2022, when it went down by 3.60 centavos per kWh for a typical residential customer. (TCSP)
