Electricity rates to go up by 42¢/kwh this month

MANILA, Philippines – Customers of the Manila Electric Co. (Meralco) will see their bills go up by 42 centavos per kilowatt-hour this month due to higher generation costs from power supply deals.

Aside from this, the power distributor also sees higher electricity rates in the coming months as summer nears.

For this month, a typical household consuming 200 kwh a month will see an increase of P85 in its electricity bill, Meralco said yesterday.

The power rate increase comes after nine consecutive months of reductions amounting to P2.28 per kwh.

Meralco pointed out that this month’s overall rate of P8.82 per kwh is lower by P1.69 per kwh compared to P10.51 per kwh in the same month last year.

The distribution utility said higher rates are a result of a P0.25 per kwh increase in generation charge to P4.17 per kwh. This, however, is lower by P1.07 per kwh from P5.24 per kwh last year.

The climb in the generation charge, the payment to power suppliers, is primarily due to the higher power supply agreements (PSAs) charges of P0.76 per kwh.

“Cost of purchases from PSAs, which were low last month due to adjustments from an annual reconciliation of outage allowances, normalized this month,” Meralco said.

“Also contributing to the increase in PSA charges are their lower plant capacity factors, partly due to the scheduled maintenance shutdown of one unit each of the Calaca and Masinloc power plants,” it added.

The Calaca coal-fired power plant in Batangas supplies 600 megawatts while the Masinloc plant in Zambales supplies 630 MW to the Luzon grid.

The rise in PSA charges negated the reduction in charges from the Wholesale Electricity Spot Market (WESM) and independent power producers (IPPs).

WESM charges registered a reduction of P2.21 per kwh, largely due to lower system demand.

Meanwhile, the average rate of the IPPs slightly went down by P0.01 per kwh since the reduced dispatch from these plants offset decline in the average price of natural gas for the First Gas plants to $6.79/GJ from $7.71/GJ following the quarterly repricing of Malampaya natural gas.

In terms of other bill components, Meralco said transmission charge also registered an increase of P0.08 per kwh due to higher ancillary charges. This component is the payment that goes to the National Grid Corp. of the Philippines.

Following the increase in generation and transmission charges, taxes went up by P0.05 per kwh and other charges also increased by P0.04 per kwh.

Summer trend

Meralco said the projection of an even higher electricity rate this summer is based on historical data, consumption and consequently overall demand for power spike as temperature rises.

“This could be more evident, especially because the country is experiencing El Niño,” the power distributor said.

Meralco urged the public to observe energy efficiency tips, including setting the air conditioner’s thermostat from high cool (18°C) to mid cool (25°C) where customers can save up to P354 per month.