Meralco hikes April power rate

After two consecutive months of power rate reductions, the Manila Electric Company is doing the opposite for April, due to higher generation cost amid tighter supply in Luzon during the warmer dry season weather.

In an advisory, Meralco announced that it is increasing its household rate by P0.0872 per kilowatt-hour (/kWh), bringing the overall rate for the month to P8.4067/kWh from P8.3195/kWh in March.

The power rate hike is equivalent to around P17 in the total bill of residential customers consuming 200 kWh.

Nonetheless, Meralco said April’s overall rate is still at P8.5884/kWh, which is lower than last year’s P8.9951/kWh.

“This month’s rate also still includes the Energy Regulatory Commission (ERC)-approved adjustments for pass-through over/under-recoveries for the period January 2017 to December 2019,” it said.

In an order released on December 29, 2020, the ERC directed Meralco to refund over-recoveries in transmission and other charges over a period of approximately three months and to collect an under-recovery in the generation rate for approximately 24 months.

Meralco implemented the ERC-approved adjustments starting January 2021.

It said that the impact to residential customers, from January to April 2021, is a net refund of around P0.1150/kWh.

Also, it said it is continuing its implementation of the Distribution Rate True-Up refund, which began in March 2021. 

Earlier, the ERC provisionally approved Meralco's proposal to refund some P13.9 billion over a period of 24 months, or until the amount is fully refunded.

This amount represents the difference between the Actual Weighted Average Tariff and the ERC-approved Interim Average Rate for distribution-related charges for the period July 2015 to November 2020. 

For residential customers, the refund rate is P0.2761/kWh and will appear in customer bills as a line item called “Dist True-Up”.

Meralco said higher Wholesale Electricity Spot Market (WESM) prices led to generation charge increase, which for April is P4.5370/kWh, or P0.1621 higher than last month’s P4.3749/kWh.

“WESM charges increased by P2.5991/kWh due to tighter supply conditions in the Luzon grid. Peak demand in Luzon increased by almost 1,000 megawatts (MW) in March as a result of warmer temperature, while unavailable capacity from plant outages remained above 3,400 MW,” Meralco said.

WESM’s share to Meralco's supply in April is 11%.

Mitigating the increase in WESM charges are the lower costs from Independent Power Producers (IPPs) and Power Supply Agreements (PSAs).

Charges of IPPs and PSAs decreased by P0.2090 and P0.1371/kWh, respectively, due to improved average plant dispatch and Peso appreciation.

The shares of IPPs and PSAs to Meralco this month are 39% and 50%, respectively.

On the other hand, transmission charge for residential customers decreased by P0.0856/kWh mainly due to lower ancillary service charges, while taxes and other charges registered a net increase of P0.0107/kWh.

Collection of the Universal Charge-Environmental Charge amounting to P0.0025/kWh remains suspended, as directed by the ERC.

Meralco's distribution, supply, and metering charges, meanwhile, have remained unchanged for 69 months, after these registered reductions in July 2015.

Meralco reiterated that it does not earn from the pass-through charges, such as the generation and transmission charges.

Payment for the generation charge goes to the power suppliers, while payment for the transmission charge goes to the National Grid Corp. of the Philippines. Taxes and other public policy charges like the Universal Charges and the FIT-All are remitted to the government. —LBG, GMA News