Meralco hikes rates for households this March

Typical households  in areas served by Manila Electric Co. (Meralco) can expect higher electricity bills this month as the power distributor is set to hike rates by PHP 0.2639 per kilowatt-hour (kWh) due to higher transmission charge and feed-in tariff allowance (FIT-All).

The upward adjustment pushed the overall rate to PHP 12.2901 per kWh in March from PHP 12.0262 per kWh in February, the company said in a statement on Tuesday.

Households consuming 200 kWh will see their monthly electricity bills go up by around PHP 53. Those consuming 300 kWh, 400 kWh, and 500 kWh will have to pay an additional PHP 79, PHP 106, and PHP 132, respectively.

Meralco attributed the rate increase to the conclusion of the one-time refund on regulatory reset fee, equivalent to PHP 0.2264 per kWh for its customers. The refund was implemented last month as ordered by the Energy Regulatory Commission (ERC).

Also contributing to higher rates was the PHP 0.1294 per kWh increase in transmission charge due to higher ancillary service charges incurred by the National Grid Corp. of the Philippines. The transmission charge for March also covered the second of three monthly collections for the recovery of costs of reserve market suppliers.

The ERC directed the recovery of the remaining 70% of the reserve market settlement fees incurred in March last year. This will be reflected in customers’ bills until April.

Adding to the upward adjustment was the implementation of the new FIT-All rate of PHP 0.1189 per kWh, which was higher than the previous rate of PHP 0.0838 per kWh.

The FIT-All is a uniform charge billed to all on-grid electricity consumers to support the development and promotion of renewable energy.

Other charges, which included taxes, increased by PHP 0.0416 per kWh.

“Such increases were mitigated by the lower generation charge for February supply month that impacted the March billings of Meralco customers. The reduction is almost 17 centavos per kWh in generation charge,” Joe R. Zaldarriaga, Meralco vice-president and head of corporate communications, said in Filipino during a briefing.

The generation charge fell by PHP 0.1686 per kWh to PHP 7.0517 from PHP 7.2203 per kWh last month due to lower costs from Meralco’s supply sources.

The peso appreciation against the US dollar pushed down the charges from independent power producers (IPP) and power supply agreements (PSA) to PHP 1.0143 per kWh and P0.2934 per kWh, respectively. Around 98% of IPP costs and 61% of PSA costs were dollar-denominated.

The peso closed at PHP 57.995 on Feb. 28, strengthening by 37 centavos from its PHP 58.365 finish on Jan. 31.

Charges in the Wholesale Electricity Spot Market (WESM), the trading floor of electricity, decreased by PHP 0.2247 per kWh due to the improved supply situation in Luzon.

IPPs, PSAs, and WESM accounted for 31%, 47%, and 22% respectively of the company’s total energy requirement for the period.

“Pass-through charges for generation and transmission are paid by Meralco to the power suppliers and the grid operator, respectively; while taxes, universal charges, and FIT-All are all remitted to the government,” Meralco said.

The company’s distribution charge has not moved at PHP 0.0360 per kWh since August 2022.

Lawrence S. Fernandez, Meralco vice-president and head of utility economics, said prices at the spot market might shoot up after the declaration of a yellow alert over the Luzon grid last week. 

“Let’s see what will happen for the rest of the month. Demand has moderated a bit after that one time of yellow alert. So, we’ll have to see what the situation will be for the rest of the month,” he said.

Meanwhile, Mr. Zaldarriaga said Meralco’s energy requirements are fully covered by its suppliers as the summer season approaches.

“We entered into an emergency power supply agreement to cover our requirements, especially during peak load come the summer months. Although it has not been officially declared, we already feel the impact of the temperature levels on our demand,” he said.

“So, as long as there will be no unplanned and forced outages from the plants and as long as transmission will be able to supply the load coming from the power plants, we don’t see any problems come the summer months,” he added.

Meralco’s controlling stakeholder, Beacon Electric Asset Holdings, Inc., is partly owned by PLDT Inc. Hastings Holdings, Inc., a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc., has an interest in BusinessWorld through the Philippine Star Group, which it controls. — Sheldeen Joy Talavera