Meralco rates go up in October on higher generation charge

Customers served by Manila Electric Co. (Meralco) will have to tighten their belts this month as the company hikes electricity rates due to higher costs of power purchased from suppliers.

In a statement on Monday, the power distributor said it is increasing the overall rate by PHP 0.2331 per kilowatt-hour (kWh) to PHP 13.3182 per kWh in October from PHP 13.0851 per kWh in the previous month.

For households consuming 200 kWh, this means an increase of around PHP 47 in their electricity bill. Those consuming 300 kWh, 400 kWh, and 500 kWh will have to pay an additional PHP 70, PHP 93, and PHP 117 this month, respectively.

“Primarily, the driver (for the rate hike) was the increase in generation charge of 19 centavos per kWh following the 26-centavo reduction last month,” Meralco Vice-President and Head of Corporate Communications Joe R. Zaldarriaga said at a news briefing.

Charges from independent power producers (IPPs) and power supply agreements (PSAs) rose by PHP 0.3622 and PHP 0.3567 per kWh, respectively, as the peso’s weakness against the US dollar affected their costs.

The peso closed at PHP 58.196 per dollar on Sept. 30, weakening by PHP 1.07 from its PHP 57.13 finish on Aug. 29.

This month’s generation charge also reflected the impact of the interim extension of Meralco’s power purchase agreement as approved by the Energy Regulatory Commission.

Tempering the increase in the generation charge was the PHP 2.0688 per kWh reduction in charges from the Wholesale Electricity Spot Market (WESM), due to lower peak demand in Luzon.

IPPs, PSAs, and WESM accounted for 21%, 74%, and 5%, respectively, of Meralco’s total energy requirement for October.

Meanwhile, the transmission charge increased by PHP 0.0114 per kWh, mainly due to slightly higher wheeling charges as a result of lower system demand.

Taxes and other charges registered a total increase of PHP 0.0314 per kWh for the month.

“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 Feed-in Tariff Allowance are all remitted to the government,” the company said.

Meralco’s distribution charge has not moved since the PHP 0.0360 per kWh decrease in August 2022.

The power distributor is currently issuing a refund of PHP 0.2024 per kWh for residential customers as part of the distribution-related true-up adjustment.

Readiness for earthquake

Meanwhile, Mr. Zaldarriaga said that Meralco has contingency measures in place and is ready to respond to any potential calamity that will impact its franchise area.

“We are investing heavily on our distribution resiliency program… We are readying ourselves for any potential calamity whether it’s an earthquake or a strong typhoon that will impact on our franchise area,” he said.

Mr. Zaldarriaga said Meralco implemented safety measures, including replacing wooden poles with taller and more durable concrete or steel ones, relocating facilities away from high-risk areas, and conducting regular maintenance of all their facilities.

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, Reporter