Meralco to increase rates this month

MANILA, Philippines — Manila Electric Co. (Meralco) said electricity rates would increase this month, mainly pulled up by the universal charge (UC) that returned to its normal level following a one-time refund. 

It said the overall rate this month rose by P0.1050 per kilowatt-hour (kWh), from P8.8901 per kWh to P8.9951 per kWh. This is equivalent to a P21 upward movement in the total bill of residential customers consuming 200 kWh.

Meralco explained that the slight rate increase is mainly due to the normalization of the UC after a one-time refund of P0.1453 per kWh in UC-NPC Stranded Contract Costs (SCC) implemented last month. The refund represented the over collection due to Power Sector Assets and Liabilities Management Corp. (PSALM).

“With the one-time refund completed, universal charge normalized this April, with an increase of the same amount implemented this month as an effect. The existing universal charge remitted to the government is used for electrification in off-grid areas, (National Power Corp.’s) financial obligations in excess of privatization proceeds and watershed rehabilitation and management,” Meralco said.

However, it also said that the UC normalization was tempered by the force majeure claim, which reduced fixed charges under power supply agreements (PSAs), and the suspension of Feed-In-Tariff Allowance (FIT-All) collection.

The generation charge decreased by P0.0247 per kWh due to the reduction in fixed charges resulting from the force majeure claim of Meralco allowed in its PSAs approved by the Energy Regulatory Commission (ERC).  

“Because of the significant reduction in power demand in its service area during the enhanced community quarantine period, Meralco invoked the force majeure provision in its PSAs for the duration of the lockdown, reducing fixed charges for generation capacity that was not consumed,” Meralco said.

Without the force majeure claim, the generation charge would have increased by P0.0259 per kWh from last month’s rate.

Charges from the Wholesale Electricity Spot Market (WESM), which catered to 11 percent of Meralco’s supply needs, also decreased by P0.9429 per kWh, driven by improved supply conditions in the Luzon grid.

“Average capacity on outage decreased in March with the return to normal operations of plants that were on scheduled maintenance last month. Meanwhile, demand for power in Luzon increased in March due to higher consumption before the start of the (quarantine),” Meralco said.

It added that the cost of power from Independent Power Producers (IPPs) also decreased by P0.0965 per kWh due to higher average plant dispatch and peso appreciation, while the increase in PSA charges was tempered by Meralco’s force majeure claim, lowering it to only P0.1696 per kWh. 

IPPs and PSAs accounted for 38 percent and 51 percent of total supply, respectively.

Meralco said it provided customers with a 30-day payment extension for bills due from March 1 to April 14.