MANILA, Philippines — Electricity rates in areas serviced by the Manila Electric Co. (Meralco) are up this month, and possibly even next month as higher temperatures have pushed demand for electricity.
Following a reduction last month, Meralco said the electricity rate this month rose to P11.4929 per kilowatt-hour from the previous month’s P11.3168 per kwh.
The upward adjustment is equivalent to an increase of around P35 in this month’s power bills for residential customers consuming 200 kwh, P53 for those consuming 300 kwh, P70 for 400 kwh and P88 for 500 kwh.
This month’s rate hike was driven by higher generation charge, which went up to P7.6697 from P7.3295 per kwh in April due to elevated Wholesale Electricity Spot Market (WESM) and power supply agreements (PSA) costs.
Meralco said May’s generation charge also includes the collection of the final installment of deferred charges equivalent to around P0.20 per kwh.
Meralco earlier made arrangements with its suppliers and with the Energy Regulatory Commission (ERC) for a staggered collection of around P1.1 billion in generation costs in the March billing to cushion the impact of the rate increase on its customers.
For this billing month, the power distributor said WESM charges rose by P1.7367 per kwh due to higher peak demand and tighter supply conditions, triggering the secondary price cap in the April supply month compared to the previous month.
Meralco sourced 18 percent of its total requirement from the electricity spot market during this period.
Charges from PSAs, which accounted for 47 percent of Meralco’s energy requirement for the period, also increased by P0.9086 per kwh, as the peso depreciation affected more than 26 percent of PSA costs that were dollar-denominated.
The power distributor said this month’s PSA rate also reflected the effect of its emergency power supply deals with South Premiere Power Corp. and Therma Luzon Inc. implemented beginning March 26 and April 12, respectively.
Charges from independent power producers, which covered 35 percent of Meralco’s total energy requirement, meanwhile, declined by P1.4014 per kwh due to higher average plant dispatch.
Meralco said this month’s rate increase was tempered by the P0.2455 per kwh reduction in the transmission charge due to significantly lower ancillary service charges.
Other charges comprising taxes, subsidies and universal charges, on the other hand, grew by P0.0814 per kwh with the inclusion of P0.0433 per kwh increase in the Universal Charge for Missionary Electrification rate as ordered by the ERC.
Pass-through charges for generation and transmission are paid by Meralco to the power suppliers and grid operator, respectively, while taxes and universal charges are remitted to the government.
Meralco’s distribution charge, meanwhile, has not moved since the P0.0360 per kwh reduction for a typical residential customer in August 2022.
Meralco said temperature levels play a big part in the overall demand for electricity as consumption historically spikes between 10 and 40 percent during the dry season.
As such, Meralco spokesperson and vice president for corporate communications Joe Zaldarriaga said further increases in electricity rates are likely by next month.
“That’s a given as we mentioned, both in terms of pricing and in terms of consumption. It will taper off sometime July,” Zaldarriaga said.
“It’s really from March to June where we need to expect an increase both in terms of consumption and in price because all the factors that come into play are usually there in those months,” he said.
Meralco is also set to complete this month the implementation of the last distribution-related refund equivalent to P0.8656 per kwh for residential customers, the impact of which would be felt in the June billing period.
The power distributor continues to encourage the public to embrace energy efficiency and conservation.
Power saving efforts that customers can practice include unplugging appliances when not in use, using LED bulbs for cost-saving lighting, ironing large batches of clothing at one time, and cleaning air conditioner filters regularly to optimize use.