Meralco hikes rates, will resume disconnections

MANILA, Philippines — Customers of Manila Electric Co. (Meralco) will see higher electricity bills at the start of the year, reflecting an increase in generation charge.

The power utility will also start issuing disconnection notices to customers for non-payment of bills since last year.

At a virtual briefing yesterday, Meralco spokesman Joe Zaldarriaga said January rates increased by P0.2744 per kilowatt-hour from last month’s P8.4753 per kwh to P8.7497 per kwh.

This is equivalent to an increase of around P55 in the total bill of residential customers consuming 200 kwh, P82 for 300 kwh, P110 for 400 kwh and P137 for 500 kwh.

Despite the rate increase, Zaldarriaga said this month’s overall rate is still P0.70 per kwh lower than January 2020’s rate of P9.4523 per kwh, largely because of power rate reductions totaling a P1.39 per kwh net overall rate for the entire 2020.

The Meralco official also said the order of Energy Regulatory Commission (ERC) to refund and recover pass-through charges mitigated this month’s rate increase.

The order, which directed Meralco to refund over-recoveries in transmission and other charges in three months and to collect an under-recovery in the generation rate in 24 months, will reflect a net refund of P0.1150 per kwh to residential customers.

The overall rate increase was mainly brought about by higher generation charge, the electricity bill’s biggest component.

January generation charge was P4.4574 per kwh, P0.3058 per kwh higher than December’s generation charge of P4.1516 per kwh.

PSA (power supply agreement) and IPP (independent power producer) rates increased by P0.2723 and P0.2428 per kwh, respectively, as Luzon peak demand in December decreased by 252 megawatts from 9,886 MW to 9,634 MW due to cooler temperature and more non-working holidays compared to November.

The demand for power in Meralco’s franchise area in December fell to its lowest level since lifting of the enhanced community quarantine (ECQ) in May.

“Lower demand led to fixed costs from power suppliers being spread over lower energy volume, resulting in higher effective generation rates to consumers,” the firm said.

WESM rate down

Meanwhile, wholesale electricity spot market rate decreased by P0.6135 per kwh. PSAs, IPPs and WESM provided 56.4 percent, 37.3 percent and 6.3 percent of Meralco’s energy requirements, respectively.

In terms of other charges, the transmission charge for residential customers registered a reduction of P0.0236 per kwh due to the refund of transmission over-recoveries, while taxes and other charges registered a net decrease of P0.0078 per kwh, despite the recently approved increase in Feed-in Tariff Allowance (FIT-All).

Last month, the ERC authorized the collection of a FIT-All of P0.0983 per kwh starting this month. This means a P0.0488 per kwh increase in the FIT-All this month, from the previously approved FIT-All of P0.0495 per kwh.

The collection of the universal charge-environmental charge amounting to P0.0025 per kwh remains suspended, as directed by the ERC.

Meralco’s distribution, supply and metering charges, meanwhile, have remained unchanged for 66 months, after these registered reductions in July 2015.

Disconnection

Meralco is also encouraging customers with unpaid bills to start settling their obligations.

“We’re encouraging (them) to settle already. It’s been quite some time. There really is no recourse on our part but to collect, considering also that we have to consider the viability of our operations,” Zaldarriaga said.

Starting this month, Meralco will start sending disconnection notices to 201 kwh and above customers with unpaid accounts.

On the other hand, those consuming 200 kwh and below have until the end of the month to enjoy the no disconnection policy.

“We have already started to issue the (disconnection notices) for those with arrears and whose accounts remain unpaid,” Zaldarriaga said.

“For customers consuming 201 kwh and above, we will already be effecting the collection of their arrears. Those 200 kwh and below have until end January,” he said.

The Meralco official, however, said those who receive disconnection notices would be given enough time to settle their bills.

“By next week, we may be implementing already the collection due and demandable, and possible disconnection as well,” Zaldarriaga said.

Last month, Meralco extended the grace period for unpaid electricity bills until the end of January, benefitting more than three million customers with consumption of 200 kwh and below during the billing month of December.

This represents around 47 percent of Meralco’s total customer base, Meralco president and CEO Ray Espinosa said.

The extension of the grace period came after the request of Speaker Lord Allan Velasco to keep the lights on during the Christmas season.