ERC-backed measures pull down Meralco’s May power rate

The Manila Electric Company (Meralco) lowered its electricity rate for May by P0.0151 per kilowatt-hour (kWh), bringing the overall rate for a typical household to P14.3345 per kWh from P14.3496 per kWh in April.

Meralco attributed the slight reduction to mitigating measures approved by the Energy Regulatory Commission (ERC), which helped offset higher generation costs driven by global fuel prices and peso depreciation.

“Despite initial indications of an increase, Meralco power rates this May had a modest reduction,” said Meralco Vice President and Head of Corporate Communications Joe R. Zaldarriaga.

“This was achieved through the proactive efforts led by the Energy Regulatory Commission (ERC) to cushion the impact of potentially high rates as a result of the geopolitical tensions that ultimately affect energy prices,” he added.

Still, Zaldarriaga cautioned consumers that electricity bills may rise if power consumption increases during the summer months.

“While our customers stand to benefit from relatively stable rates this May, we would like to advise our customers that the bills that they will receive may still go up depending on their actual consumption, which usually increases during the summer months,” he said.

Meralco said the rate reduction was driven largely by the acceleration of its ongoing refund, following the ERC’s directive to complete the remaining P14.2 Billion refund within 12 months rather than two years.

As a result, the refund rate for residential customers increased to P0.4278 per kWh from P0.2024 per kWh.

Taxes and other charges also declined by a net P0.1482 per kWh. The ERC suspended the collection of the P0.0371 per kWh Green Energy Auction Allowance from May to June, while consumers also partially benefited from the delayed implementation of the value-added tax exemption on electricity generated using indigenous natural gas under Republic Act No. 12120.

Transmission charges likewise decreased by P0.0493 per kWh.

Despite the overall reduction in rates, the generation charge increased to P8.7942 per kWh from P8.3864 per kWh in April due to higher Wholesale Electricity Spot Market (WESM) charges, rising fuel costs, and the depreciation of the peso.

Meralco said WESM charges rose significantly, particularly the line rental component.

To mitigate the increase, the ERC allowed the immediate application of line rental caps under Meralco’s power supply agreements, resulting in a P0.1793 per kWh reduction in supplier charges.

Charges from Independent Power Producers (IPP) also increased by P0.1786 per kWh due to higher fuel costs and the weaker peso, with 99 percent of costs denominated in dollars.

Meralco said power supply agreements accounted for 73 percent of its total energy requirement during the period, while IPP and WESM contributed 20 percent and 7 percent, respectively.

The utility reiterated its call for consumers to practice energy efficiency and conservation.

“While overall electricity rates have gone down, the dry season is typically marked by higher consumption, especially from cooling appliances, which can still drive bills upward. By being more mindful of their power consumption and observing energy efficiency, customers can take better control of their electricity bills,” Zaldarriaga said.