Indicators point to June rate hike

Consumers across the Manila Electric Co. (Meralco) franchise area should brace for an imminent electricity rate hike this June due to several variables triggered by the thinning power supply. 

Meralco vice president and spokesperson Joe Zaldarriaga said on Monday that the projected power rates adjustment will be influenced by the upward pressure on the generation charge due to the tight supply conditions in the Luzon grid.

“We’ve experienced a series of red and yellow alerts in the last supply month, and as we know, these conditions affect generation costs particularly that in the Wholesale Electricity Spot Market or WESM,” Zaldarriaga said in a text message.

The Luzon grid was under yellow alert on Monday from 1 p.m. to 4 p.m. and from 6 p.m. to 10 p.m. due to the increase in forecasted demand. 

The available capacity of the grid yesterday was projected to reach 14,457 MW whereas peak demand was likely to reach 13,484 MW. 

A yellow alert is issued when the operating margin is insufficient to meet the transmission grid’s contingency requirement.

Likewise, Zaldarriaga said that the settlement costs in the reserve market as well as the increase in feed-in-tariff allowance (FIT-All) will be reflected in the bills of customers this month.

The Energy Regulatory Commission (ERC) has partially lifted the suspension on settlement amounts in the Reserve Market, allowing the National Grid Corporation of the Philippines (NGCP) to recover costs for trading transactions made in March. 

Consequently, NGCP anticipates an increase of over P0.10 per kWh in the ancillary services component of the transmission charge in June.

Furthermore, the ERC also approved implementing the new FIT-All program, which will take effect starting this month. The move will lead to an increase of P0.0474 per kilowatt-hour (kWh).

Last month, Meralco rates increased by P0.46 per kWh following a steep drop of almost one peso in April, largely due to the generation charge driven by higher costs from the WESM.

PEPOA backs franchise bid

The Private Electric Power Operators Association (PEPOA), the group of local power plant operators, issued its support for the renewal of Meralco’s franchise.

The group said Meralco has provided reliable electricity that served as the backbone of businesses and enhanced the quality of life for millions of Filipinos.

The House of Representatives is currently deliberating on a bill that will extend the franchise of Meralco for another 25 years ahead of its 2028 expiration.

“Its dedication to operational excellence and resilience demonstrates its firm resolve to reduce system losses and the duration and frequency of power interruptions that greatly benefited electricity end-users,” according to PEPOA.