Manila Electric Co. (Meralco) consumers in Manila will face an approximate P2.15 per kilowatt-hour (kWh) increase in their electricity bills this month due to higher generation charges.
The price adjustment will result in a P11.60 per kWh increase in rates from P9.45 per kWh last month, or a total increase of P430 in the electricity bill for households consuming 200 kWh.
Energy Regulatory Commision chairperson Monalisa Dimalanta said the generation rate increase is “higher than expected.”
“I think the higher rate compared to last month is expected, particularly for Meralco since they are implementing two staggered payment schemes — one arranged by them with their IPPs (Independent Power Producers) and the other ordered by the Commission on WESM (Wholesale Electricity Spot Market) purchases. The bulk of Meralco’s supply comes from its IPPs (independent power producers),” Dimalanta said.
“Admittedly, though, the P2.0021/kWh generation rate increase is higher than expected. In any event, the rates are subject to the commission’s validation under our cost adjustment (over/under) regulations,” she added.
Low rate ‘artificial’
Meralco said the spike in generation charge is a consequence of normalized power cost following an “artificially” low rate last month.
Following a considerable decrease in June, the generation charge increased by P2.0 per kWh in July due to the normalization of Wholesale Electricity Spot Market (WESM) fees.
Meralco reiterated that the adjustment resulted from the Energy Regulatory Commission’s (ERC) directive to distribute the collection of charges for the May supply month equally over four months, ending in September.
The directive is aside from the ERC’s clearance to stagger the collection of around P500 million in May generation costs until September, following Meralco’s request, along with Quezon Power (Philippines) Ltd. (QPPL), San Buenaventura Power Ltd. Co. (SBPL), and South Premiere Power Corporation (SPPC) under its 2024 Emergency PSA (EPSA).
Notably, the WESM charges this July rose by P6.64 per kWh due to the normalization of charges and the recovery of a portion of deferred WESM costs from May.
Charges from IPPs also increased by 44 centavos per kWh due to higher fuel costs and lower average plant dispatch.
Meanwhile, Power Supply Agreements charges increased by 35 centavos per kWh as charges normalized and included the recovery of deferred costs for SBPL and SPPC’s 2024 EPSA.
Transmission charges decreased by 16 centavos per kWh due to the absence of reserve market settlement charges that affected last month’s ancillary service charges.
Taxes and other charges, on the other hand, registered a net increase of 30 centavos per kWh.
Meralco’s distribution charge has not moved since the 3.60 centavos per kWh reduction for a typical residential customer in August 2022.
