Electricity rates likely up this month

MANILA, Philippines — Electricity rates within the franchise coverage of energy utility provider Manila Electric Co. (Meralco) will likely increase this month due to the amortization of deferred charges.

Ahead of the official announcement for July rates, Meralco VP and head of utility economics Lawrence Fernandez said initial indicators point to a possible hike in generation costs.

“We may expect strong pressures for the generation charge to increase this July,” he said in a message to reporters.

This came after generation costs saw a reduction in June following an Energy Regulatory Commission order to stagger the collection of wholesale electricity spot market (WESM) charges over a four-month period.

“Thus, from an artificially low level in June, we should expect WESM charges to normalize in the July generation charge,” Fernandez noted.

He said that WESM charges would also be impacted by a series of red alerts raised in the Luzon grid at the start of the June supply month, which was partly offset by the lower consumer demand due to the onset of the rainy season.

On top of the normalization of WESM charges, the amortization of deferred charges, estimated at P0.77 per kilowatt-hour (kWh), is also expected to have an impact on power rates.

Meralco lowered its rates by P1.9623 per kWh last month, bringing the overall electricity rates to P9.4516 per kWh from the P11.4139 per kWh implemented in May.

The adjustments translated to a decrease of around P392 in the electricity bills of typical households consuming 200 kWh a month.

Meralco VP and head of corporate communications Joe Zaldarriaga earlier said generation charges would increase until September to collect the deferred amounts on a staggered basis.