Power hike adds to consumer strain

While many are still grappling with a sharp spike in fuel prices, electricity users served by Manila Electric Company (Meralco) will also see higher power bills this month after the utility raised rates. 

Meralco said Tuesday the overall rate increased by P0.6427 per kilowatt-hours (kWh) to P13.8161 per kWh this month from P13.1734 per kWh in February. It will add about P129 to the monthly bill of a typical household consuming 200 kWh. 

Higher transmission and generation charges pushed up the overall rate.

Transmission charges rose by P0.2880 per kWh, largely due to a 70 percent increase in ancillary service charges incurred by the transmission operator from the Reserve Market. Costs from the Reserve Market accounted for nearly half of the total transmission charge this billing month.

Generation charges also went up by P0.2209 per kWh to P7.8607 per kWh.

These increases partly offset a P1.0952 per kWh reduction in charges from the Wholesale Electricity Spot Market, as supply conditions in the Luzon grid improved.

The generation charge also reflected a P0.2817 per kWh contract price adjustment for supply from ACEN Corp., Panay Energy Development Corp., South Premiere Power Corp. and Sual Power Inc. approved by the Energy Regulatory Commission.

The adjustment is equivalent to about P789 million in generation costs for this billing month.

The impact was more than offset by the completion of the recovery of a previous contract price adjustment for South Premiere Power Corp. and Sual Power Inc., totaling P858 million or about P0.30 per kWh.

Other charges, including taxes, registered a net increase of P0.1338 per kWh.

According to Meralco, the March rate also reflected the implementation of the new uniform national lifeline subsidy rate of P0.01 per kWh following a directive from the Energy Regulatory Commission.

Meralco said generation and transmission charges are pass-through costs paid to power suppliers and the grid operator, while taxes, universal charges and renewable energy subsidies are remitted to the government.

The company’s distribution charge has remained unchanged since a P0.0360 per kWh reduction for residential customers implemented in August 2022.

“We are entering a period when demand for electricity traditionally peaks, and external factors are adding pressure to energy costs,” Meralco Vice President and Head of Corporate Communications Joe R. Zaldarriaga said. 

“By embracing energy efficiency, consumers can have better control on their electricity bills and at the same time, contribute to mitigating the impact of external factors on electricity costs.”

Meralco, upon the instruction of chairman Manuel V. Pangilinan, has begun reviewing its fuel supply mix to help shield consumers from potential electricity rate shocks as global energy prices rise amid unrest in the Middle East.

The company is monitoring its liquefied natural gas inventory as well as coal and diesel prices, which could push up power costs. Much of the country’s power fuel is imported, making electricity prices sensitive to global market movements.

About 60 percent of Meralco’s fuel requirement comes from natural gas, about half of which is imported. Coal accounts for about 20 to 25 percent of the mix, renewable energy about 10 percent, while the remaining 5 to 10 percent is sourced from the spot market.