MANILA, Philippines — Households and businesses in areas served by Manila Electric Co. could see another month of high power bills in April after the utility company paid more for electricity it sold to its customers.
In a statement on Monday, the largest power distributor in the country announced that its overall rate for a typical household went up by P0.5363 to P10.1830 per kWh, marking the second straight increase this year.
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This means a typical household consuming 200 kWh per month can expect to see a P107 hike in their power bills in April. Meanwhile, residential customers consuming 300 kWh, 400 kWh and 500 kWh will see an increase of P161, P215 and P268, respectively, in their electric bills.
The rate hike could add to the burden of Filipinos grappling with quickening inflation, which hit a six-month high in March. Explaining the adjustment, Meralco said generation charge, which the company collects from its customers to cover the costs of procuring power from energy producers, went up by P0.3987.
Higher fees from IPPs, spot market
Meralco explained it paid more for electricity it bought from independent power producers (IPPs) and the wholesale electricity spot market (WESM), which had a combined 48.4% share to the company’s total energy needs this month.
Meralco said IPP charges rose by P1.4885 per kWh, citing the unavailability of the Quezon power plant — where the company sources a portion of its power — until March 24. IPPs fees were also higher due to failure of the Malampaya gas project to provide natural gas to First Gas Sta. Rita, which had to run using more expensive liquid fuel.
The maintenance shutdown of the Quezon power plant and stronger demand amid the dry season prompted Meralco to buy energy from the WESM, a venue where electricity is traded at higher costs compared to pre-agreed supply deals. This, in turn, pushed up WESM prices to a level that triggered the secondary price cap.
The overall rate in April would have been higher had it not been for lower charges from power supply agreements (PSAs), where Meralco got 51.6% of energy it distributed to its franchise area. The company said PSA fees went down by P0.1068 per kWh after the company asked regulators and some of its suppliers to “again defer collection of portions of their generation costs to cushion the impact on the customers’ bills.”
All these deferred charges and costs totaling P1.2 billion will subsequently be billed on a staggered basis over the next three months.
Moving forward, Meralco warned that generation rates are still expected to increase in the coming months.
"On top of the deferred generation charges, the impact of the quarterly repricing of the Malampaya natural gas for the April supply will be reflected in the generation charge in May," the utility firm said.
"Electricity consumption historically increases during the dry months, and this is expected to also weigh on the customers’ power bills,” it added.