Meralco hikes power rates anew for November

Customers of the Manila Electric Company (Meralco) should brace for heftier electricity bills this month as the power distributor raised its household power rate for November.

This is the third straight time that Meralco hiked its power rate, following two consecutive months of rate reductions.

In an advisory on Thursday, the power distributor announced an upward adjustment of 23.47 centavos per kilowatt hour (kWh) this month, bringing the overall household rate to P12.0545 per kWh from P11.8198 per kWh in October.

The power rate hike could translate to an increase of about P47 in the total bill of a typical household consuming 200 kWh.

Meralco attributed the increase in November power rate to the uptick in the transmission charge, which went up by 12.11 centavos per kWh for residential customers “due to higher ancillary service charges.”

In particular, the company said the ancillary service charge of the National Grid Corporation of the Philippines (NGCP) grew from P23.17 per kW to P91.35 per kW.

Ancillary services refer to the on-call supplementary power supply which the NGCP taps to regulate reserves to manage power fluctuations and stabilize the grid.

Meralco said the cost of regulating reserves accounted for around 76.5% of total ancillary service charges.

As of October this year, the Energy Regulatory Commission (ERC) has approved an additional 257.78 megawatts (MW) for regulating reserves under new ancillary service procurement agreements.

Moreover, Meralco said the generation charge for November also rose by 6.71 centavos to P7.1938 per kWh from P7.1267 per kWh last month due to higher charges from the Wholesale Electricity Spot Market (WESM) and Independent Power Producers (IPPs).

This, as WESM charges increased by P1.0933 per kWh “due to tight supply conditions in the Luzon grid.”

Meralco explained that average capacity on outage increased by around 956 MW and persistent high spot market prices triggered the imposition of the secondary price cap 7.22% of the time.

Charges from IPPs also went up by P0.1093 per kWh mainly due to lower IPP dispatch and an increase in price of natural gas following its quarterly repricing.

Meanwhile, 29.80 centavos per kWh decrease in Power Supply Agreement (PSA) charges mitigated the increase in the generation charge.

Lower international coal prices, higher PSA dispatch, and higher excess energy deliveries, which are price-discounted, contributed to lower the PSA rate, according to Meralco.

The power distributor said WESM, IPPs, and PSAs accounted for 14.3%, 32.5%, and 53.2%, respectively, of its total energy requirement for the October supply month.

Other charges also registered a 4.65 centavos per kWh total increase.

The collection of the Feed-In Tariff Allowance (FIT-All), at the rate of 3.64 centavos per kWh, remains suspended as directed by the ERC.

“Pass-through charges for generation and transmission are paid by Meralco to the power suppliers and the grid operator, respectively, while taxes, universal charges, and FIT-All are all remitted to the government,” it said.

“Meralco’s distribution charge, meanwhile, has not moved since the 3.60 centavos per kWh reduction for a typical residential customer beginning August 2022,” it added.—AOL, GMA Integrated News