Customers of the Manila Electric Co. (Meralco) should prepare to pay an additional 64 centavos for every kilowatt-hour (kWh) of their power consumption this month—with the spike in generation cost as the main culprit in driving the prices up. 

Meralco announced on Thursday that the overall rate for a typical household rose to P12.0575 per kWh from the previous month’s P11.4139 per kWh.

The upward adjustment translates to about a P129 increase in the total power bills of residential customers consuming 200 kWh.

According to Meralco, the generation charge went up by about 35 centavos per kWh mainly due to higher costs from the Wholesale Electricity Spot Market (WESM).

“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 V. Valles, said.

To help reduce exposure to WESM, Valles said Meralco is hoping for the approval of the Energy Regulatory Commission (ERC) for its 400-MW interim power supply agreement (PSA) with Limay Power Inc.

Installment payment approved

Meralco, in collaboration with Quezon Power (Philippines) Ltd., San Buenaventura Power Ltd. Co. (SBPL), and South Premiere Power Corporation (SPPC), has delayed the collection of approximately P500 million in generation costs.

This results in a reduction of more than 13 centavos per kWh in this month's generation charge. 

Following approval from the ERC, this deferred amount will be billed in installments over the next three months.

For this month’s billing, WESM charges were higher by P1.5203 per kWh due to tight supply conditions in May as average demand went up by more than 1,200 MW. 

The Luzon Grid was on Yellow Alert for 12 days and was on Red Alert last 23 May. Additionally, the persistently high spot market prices triggered the imposition of the secondary price cap 19 percent of the time.