Meralco hikes power rate by P0.545/kWh in March

Customers of the Manila Electric Company (Meralco) should brace for a costlier electricity bill this month as the power distributor hiked its household rate for March.

In an advisory, Meralco said its overall household rate was increased by P0.5453 per kilowatt-hour (kWh) to P11.4348 per kWh from February’s P10.8895 per kWh.

The upward adjustment translates to an increment of P109 in the total bill of a typical household consuming 200 kWh.

The higher electricity rate in March resulted from higher generation charge which grew by P0.4636 per kWH to P7.3790 per kWh from P6.9154 per kWh versus the prior month due to higher supply costs from use of more expensive alternative fuels to ensure the continuous supply.

However, Meralco head of Regulatory Management Office Jose Ronald Valles said that “this month’s generation charge increase would have been significantly higher, but we took the initiative to cushion the impact in the bills of our customers by coordinating with some of our suppliers to defer collection of portions of their generation costs.”

Valles said that a total of around P1.1 billion deferred costs reduced this month’s generation rate by about P0.40 per kWh and will be billed on a staggered basis over the next two months or in April and May billing months, as coordinated with the Energy Regulatory Commission (ERC). 

Meanwhile, charges from Independent Power Producers (IPPs) increased by P0.5784 per kWh, net of deferred generation costs.

IPPs accounted for 35% of Meralco’s total energy requirement for the period.

Wholesale Electricity Spot Market (WESM) charges, likewise, increased by P1.4795 per kWh, resulting from an increase in demand in the Luzon grid.

Peak and average demand went up by 457 MW and 675 MW, respectively, while average capacity on outage remained at around 3,800 MW, according to Meralco.

The power distributor said it sourced 22% of its total requirement from the WESM during the period, from 16% last month, due to the Energy department-approved scheduled maintenance of the Quezon Power plant and the First NatGas-San Gabriel power plant.

Charges from Power Supply Agreements (PSAs) remained generally flat, largely due to the deferral of collection of a portion of PSA costs.

PSAs covered the remaining 43% of Meralco’s total requirement in the last supply month.

All other charges, including transmission charge and taxes, registered a net upward adjustment of P0.0817 per kWh.

Collection of the P0.0364 Feed-In Tariff Allowance (FIT-All) remains suspended following the issuance of the ERC Resolution extending the suspension for another six months, beginning this March until the August billing month.

Meralco said the pass-through charges for generation and transmission are paid to the power suppliers and the grid operator, respectively, while taxes, universal charges, and Feed-In Tariff Allowance (FIT-All) are all remitted to the government.

Meralco said its distribution charge has not moved since the P0.0360 per kWh reduction for a typical residential customer in August 2022.

The power distributor said it is still implementing one distribution-related refund, equivalent to P0.8656 per kWh for residential customers, which continues to temper their monthly bills.

The final refund is set to be completed by May 2023, impact of which will be felt the succeeding month, it said. — RSJ, GMA Integrated News