Electricity bills to go down as Meralco implements refund

Electricity bills of residential households served by Manila Electric Co. (Meralco) will dip slightly this month, as the power distributor begins implementing a large refund that will help offset increases in other costs.

The overall rate will decrease by PHP 0.0428 per kilowatt-hour (kWh) to PHP 14.7833 per kWh in August from PHP 14.8261 per kWh last month, the company said in a statement on Monday.

Households consuming 200 kWh will see their monthly electricity bills go down by PHP 8. Those consuming 300 kWh, 400 kWh, and 500 kWh will see reductions of about PHP 13, PHP 17, and PHP 21, respectively.

Meralco Vice-President and Head of Corporate Communications Joe R. Zaldarriaga attributed the decline in the power rates to the PHP 9.5-billion refund approved by the Energy Regulatory Commission (ERC).

“The main driver was the ERC approved the refund that was able to offset other increases in the other bill components. The refund is equivalent to 58.61 centavos per kWh,” Mr. Zaldarriaga said at a briefing.

The ERC authorized Meralco to implement the refund over a six-month period starting August due to over-recoveries in the actual weighted average tariff (AWAT). This is on top of the ongoing refund of PHP 0.4278 per kWh that also pertains to Meralco’s AWAT for residential customers.

“As earlier explained by the regulator, this refund stems from the delay in rate reset process of distribution utilities in the country that includes Meralco. We submitted the refund application in accordance with the rules,” Mr. Zaldarriaga said.

Meralco said this month’s rate reduction would have been bigger if not for the upward adjustments in other bill components, such as the higher ancillary service (AS) charges.

AS charges — the costs of buying power reserves to maintain balance in the grid — increased by PHP 0.3024 per kWh.

According to the company, the AS charge will appear as a separate line item from the transmission charge billed by the National Grid Corp. of the Philippines (NGCP), as directed by the ERC.

Taxes and other charges went up by PHP 0.2113 per kWh, reflecting the increase in feed-in tariff allowance (FIT-All) — a uniform charge billed to all on-grid electricity consumers to support the development and promotion of renewable energy. FIT-All increased by PHP 0.1348 per kWh, bringing the total to PHP 0.3359 per kWh.

Meanwhile, the ERC also authorized Meralco to collect PHP 0.08 per kWh from its customers to recover a total of PHP 8.7 billion in pass-through charges that it has paid in advance to suppliers, NGCP, and the government from 2011 to 2022.

The charges covered were for generation, transmission, system loss, lifeline subsidy, senior citizen subsidy, real property tax, and local franchise tax.

Meralco said the generation charge increased by PHP 0.0296 per kWh. This reflects lower costs from the Wholesale Electricity Spot Market and power supply agreements, which decreased by PHP 0.5452 per kWh and PHP 0.1079 per kWh, respectively.

As ordered by the ERC, the collection of the PHP 0.0371 per kWh charge for green energy auction allowance remains suspended this month.

The distribution utility’s charge remained unchanged since the PHP 0.036 per kWh reduction for a typical residential customer beginning August 2022.

On the other hand, Mr. Zaldarriaga said that around 98,000 customers in parts of Cavite, Metro Manila, Bulacan, and Rizal have no electricity due to flooding and damaged facilities brought about by the enhanced southwest monsoon.

“As we closely monitor the situation, we assure our customers that we are working round-the-clock to restore service to the remaining affected customers as soon as possible,” he said

Meralco is the country’s largest private electric distribution utility, serving more than 8.2 million customers in Metro Manila and nearby provinces, including Bulacan, Cavite, Rizal, and parts of Laguna, Batangas, Pampanga, and Quezon.

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