Meralco rates will increase slightly this month

By means of Heroes Joy Talavera Reporter

RESIDENTIAL CUSTOMERS in areas served by Manila Electric Co. (Meralco) will see a slight increase increase in their electricity bill this month because of the higher transmission costs.

The overall rate will increase by P0.0327 per kilowatt hour (kWh) to P11.6339 per kWh in August, compared to P11.6012 per kWh in July, Meralco said in a statement on Monday.

Households consuming 200 kWh will see a P7 increase in their bills this month. Those who consume 300 kWh, 400 kWh and 500 kWh will see their bills increase by P10, P13, P16 respectively.

“The driving force behind this month’s overall tariff adjustment is the P0.1086 per kWh increase in transmission charges for residential customers due to higher grid operator charges for ancillary services, which cover the reserves necessary to ensure the reliability of the grid,” said the power distributor.

Support services costs increased by more than 50% as contingency and reserve costs doubled. These are deployed to support the transfer of power from generators to consumers to maintain reliable operation.

Joe R. Zaldarriaga, Meralco’s vice president and chief corporate communications officer, said during a briefing that the transmission fee increase Five-centavo reduction in generation costs.

Independent Power Producers (IPPs) costs decreased by P0.2974 per kWh due to higher IPP dispatch and depreciation of the peso whichFaccounted for approximately 97% of the dollar-denominated costs.

“These could also do more than oFhas caused the increase in natural gas prices in Malampaya after the quarterly repricing,” Meralco said.

Prices on the Wholesale Electricity Spot Market (WESM) fell as average peak demand in Luzon fell by 690 MW last month.

However, effective WESM charges for the month increased by P0.5940 per kWh as the company added the third of four installments of deferred WESM charges in May mandated by the Energy Regulatory Commission (ERC).

Power supply agreement (PSA) costs increased by P0.0421 per kWh, driven by higher fuel-related costs.

IPPs, WESM and PSAs accounted for 33%, 27% and 40% of the company’s total energy needs for the period.

Meanwhile, the universal allowance for missionary electrification decreased by P0.0433 per kWh upon completion of the restoration of the ERC-approved true-up tariff. This universal levy is collected from end users of electricity to finance electricityFication programs of the National Power Corp.

Taxes and other charges increased by P0.0177 per kWh.

“Charges for generation and transmission are paid to the energy suppliers and the grid operator respectively, while taxes, universal costs and feed-in tariffsFf The allowances (FIT-All) are all transferred to the government,” Meralco said.

Distribution charges have remained unchanged at P0.0360 per kWh since August 2022.

EXPECTED ADJUSTMENTS
Meralco said there may be an increase in generation costs of First Gas – Sta. Rita and San Lorenzo, who use Malampaya gas.

The old Gas Sales and Purchase Agreement (GSPA) between First Gas and the Malampaya Consortium had expired in July, so the supply of Malampaya natural gas to San Lorenzo is now governed by the new GSPA, similar to Sta. Rita.

However, the previous pricing formula for both plants continues to be applied, pending regulatory approval of the new GSPA.

“Once the new GSPAs are approved, it will definitely impact the generation rates of Sta. Rita and San Lorenzo,” said Mr Zaldarriaga.

Meralco also anticipates the possible impact of the remaining 70% of the amount due on reserve market transactions for the billing month of March.

As a reminder, the regulator suspended billing and settlement in the reserve market in March following significant price increases in reserve power costs.

In a statement on July 30, the ERC ordered the suspension to be lifted. The regulator also ordered the Independent Electricity Market Operator of the Philippines to recalculate the resulting reserve trading amounts for the periods of February and March and adjust the value for the remaining 70% for the billing month of March.

In the meantime, customers can seek relief in the next two months as collection of the deferred WESM amounts ends in September.

“Nakikita natin na pagpasok ng October, it is possible that the mayroon on Tayong Pagbaba sings a song (We see a huge possibility of a reduction in electricity bills in October),” Mr Zaldarriaga said.

Meralco’s majority shareholder, Beacon Electric Asset Holdings, Inc., is partially owned by PLDT Inc. Hastings Holdings, Inc., a part of PLDT BeneFofficial Trust Fund subsidiary MediaQuest Holdings, Inc. has an interest in Business world through the Philippine Star Group, which it controls.