RESIDENTIAL CUSTOMERS in areas served by Manila Electric Co. (Meralco) will see higher electricity bills this month due to the increase in transmission charges.
In a statement on Wednesday, Meralco said that the overall rate will climb by P0.1543 per kilowatt-hour (kWh) to P11.7882 per kWh in September from P11.6339 per kWh last month.
Households consuming 200 kWh will see their monthly bills go up by around P31. Those consuming 300 kWh, 400 kWh, and 500 kWh will have to pay an additional P46, P62, and P77, respectively.
“Driving this month’s overall rate adjustment is the P0.2913 per kWh increase in the transmission charge for residential customers due to higher ancillary service charges following the resumption of commercial operations of the reserve market on Aug. 5, 2024,” the power distributor said.
Meralco said the total ancillary service charges from the reserve market were double the charges from the National Grid Corp. of the Philippines’ (NGCP) ancillary service procurement deals. The share of ancillary service charges to the NGCP’s transmission rate jumped to over 50%.
“If not for the increase in transmission charge, we could have had a reduction this month,” Meralco Vice-President and Head of Corporate Communications Joe R. Zaldarriaga said in Filipino during a briefing.
Meralco said that higher transmission charge had more than offset the lower generation charge, which fell by P0.1547 per kWh.
The company attributed the decline in generation charge to the peso’s recent strength. The local unit closed at P56.11 per dollar on Aug. 30, which Meralco claimed was the “strongest level” since December 2023.
Meralco said the peso appreciation affected 50% of the costs of power supply agreements (PSAs) and 97% of costs of independent power producers (IPPs) that were dollar denominated.
This led to the P0.2371 per kWh and P0.0529 per kWh reductions in PSA and IPP charges, respectively.
Charges from the Wholesale Electricity Spot Market (WESM) likewise went down by P0.0514 per kWh.
“This already factored in the final of four installments of deferred May 2024 WESM costs earlier ordered by the Energy Regulatory Commission (ERC),” the company said.
PSAs, WESM, and IPPs accounted for 46.2%, 27.3%, and 26.4% of the company’s total energy requirement for the period.
Taxes and other charges went up by P0.0177 per kWh.
“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.
The distribution charge has remained unchanged at P0.0360 per kWh since August 2022.
POSSIBLE RATE ADJUSTMENTSMeralco said that the customers may seek relief from the generation charge in October as the collection of the deferred WESM amounts will end this month.
In June, the ERC directed to stagger the collection of charges related to WESM purchases over a four-month period to soften the impact of the high generation rates.
The power distributor said, however, that the Malampaya pricing under the new gas sale and purchase agreements (GSPA) of First Gas plants will be implemented starting the September supply month, which will be reflected in the October billing, under the directive of the ERC.
Lawrence S. Fernandez, Meralco’s vice-president and head of utility economics, said that implementation of the new GSPA will likely result in a 40-centavo-per-kilowatt increase in the power cost.
The company added that the cost differential between the old and new GSPAs up to the August supply month will be recovered over 12 months beginning in next month’s billing.
Meralco also anticipates the possible impact of the remaining 70% of the amount due on reserve market transactions for the March billing month.
Mr. Fernandez noted, however, that they have yet to know when the NGCP will start billing the remaining reserve market transaction.
Meralco’s controlling stakeholder, Beacon Electric Asset Holdings, Inc., is partly owned by PLDT Inc.
Hastings Holdings, Inc., a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc., has an interest in BusinessWorld through the Philippine Star Group, which it controls. — Sheldeen Joy Talavera
