Power rates seen going up this month

MANILA, Philippines — Manila Electric Co. (Meralco) rates could rise this month, following the completion of a distribution-related refund.

“We may expect an increase in rates this June, mainly due to the completion last May of the final distribution rate true-up refund,” Meralco vice president and head of utility economics department Lawrence Fernandez said.

Meralco completed last month the implementation of the last distribution-related refund equivalent to P0.8656 per kilowatt hour (kWh) for residential customers, the impact of which will be felt in the June billing period.

The refund came following an Energy Regulatory Commission decision dated June 16, 2022, directing Meralco to implement an additional distribution true-up refund totaling P21.8 billion for a period of 12 months or until the amount is fully refunded.

“This should be partially offset, though, by lower generation costs from lower coal prices and from the implementation of emergency power supply agreements (PSAs), which helped shield Meralco customers from volatile Wholesale Electricity Spot Market (WESM) prices in May,” Fernandez said.

Meralco’s electricity rate last month increased by P0.1761 per kWh to P11.4929 per kWh from April’s P11.3168 per kWh due to higher generation charge resulting from elevated WESM and PSA costs.

Meralco only earns from distribution, supply and metering charges, while pass-through charges from generation and transmission are paid to the power suppliers and system operator, respectively.

Taxes, universal charges and feed-in tariff allowance are all remitted to the government.

The company’s distribution charge has not moved since the P0.0360 per kWh reduction for a typical residential customer in August 2022.

Meralco, the country’s largest electric power distribution company, has a consolidated customer count of 7.7 million as of end March.