Manila Electric Co., the country’s largest electricity distributor, on Thursday said power rates in June will increase by P0.6436 per kiloWatt-hour, raising the overall rate for a typical household to P12.0575 per kWh from May’s P11.4139 per kWh.
Meralco, as the power distributor is better known, said this adjustment translates to an increase of around P129 in the total electricity bill for residential customers consuming 200 kWh. The higher rate will be reflected in the July bill.
The rate increase was primarily driven by higher generation charge, which rose by P0.3466/kWh due mainly to higher costs from the Wholesale Electricity Spot Market.
Meralco said the June rate increase would have been higher had several power generation companies not agree to defer the collection of power charges. It said Quezon Power (Philippines) Ltd. of Thailand’s EGCO Group; San Buenaventura Power Ltd. Co., partly owned by Meralco; and San Miguel Corp.’s South Premiere Power Corp. decided to defer the collection of around P500 million in generation costs, reducing this month’s generation charge by P0.1313 per kWh. This deferred amount will be billed on a staggered basis over the next three months, as approved by the Energy Regulatory Commission.
Meralco senior vice president and head of Regulatory Management Office Jose Ronald V. Valles, a lawyer by training, highlighted that despite facing higher pass-through costs, Meralco took proactive measures to mitigate the impact on customers.
The increase in WESM charges, which were higher by P1.5203 per kWh, stemmed from tight supply conditions in May, coupled with increased average demand and instances of the grid being on Yellow or Red Alert. Charges from Independent Power Producers (IPPs) also rose by P0.0224 per kWh, attributed to lower average IPP dispatch and peso depreciation affecting dollar-denominated costs.
However, there were some mitigating factors, such as a P0.2988 per kWh decrease in charges from power supply agreements following deferred generation costs and lower fuel costs for SPPC covered by its 2024 emergency PSA and SBPL.
Transmission charges for residential customers increased by P0.1450 per kWh due to higher ancillary service charges, as ordered by the ERC.
Additionally, a new Feed-in Tariff Allowance (FIT-All) rate of P0.0838 per kWh, approved by the ERC, contributed to the increase in transmission charges.
Meralco emphasized that distribution charges remain unchanged from August 2022.
