Meralco rates may be flat or slightly higher in October

MANILA, Philippines — Power rates of Manila Electric Co. (Meralco) are seen to be flat to slightly higher this month, with the peso depreciation providing upward pressure on the generation charge.

In a text message, Meralco VP and head of utility economics Lawrence Fernandez said generation charge is expected to remain flat or may inch up mainly due to the continued depreciation of the Philippine peso versus the US dollar.

“It can be recalled that the Philippine peso depreciated to P51 versus the greenback this week and will continue to impact charges from IPPs (First Gas-Sta Rita, First Gas-San Lorenzo, and QPPL), which are almost wholly dollar-denominated,” he said.

Meralco is also awaiting the movement of transmission charges, which account for around nine of overall rates.

“The transmission charge includes wheeling and ancillary service charges of NGCP. Presently, however, we expect the overall movement to be flattish,” Fernandez said.

Meralco announces its monthly rate in the second week of the month after receiving all power bills from suppliers.

Last month, Meralco’s overall rate for a typical household slightly increased by P0.1055 per kilowatt-hour from P9.0036 per kwh to P9.1091 per kwh due to higher generation charge.

The generation charge, which makes up about 55 percent of customers’ electricity bills, increased by P0.1117 per kWh from P4.9322 per kwh to P5.0439 per kwh.

The generation charge rose due to an increase in power supply agreements and independent power producers charges, and the correction on the net settlement surplus component in the wholesale electricity spot market.

The rate increase was mitigated by the continued implementation of the distribution rate true-up refund – approved by the Energy Regulatory Commission for implementation for 24 months beginning in March.

The refund rate for residential customers is P0.2761 per kWh and appears in customers’ bills as a line item called “Dist True-Up.”