Meralco warns that energy rates will rise in June

POWER RATES are expected to rise this month, due to higher settlement costs in the reserve market and the implementation of the new feed-in tariffance (FIT-All) rate, according to Manila Electric Co. (Meralco).

A spike in generation costs due to tight supply, coupled with the peso’s depreciation, could also contribute to higher electricity rates, the company said Monday.

Meralco vice president and spokesman Joe R. Zaldarriaga said in a statement that there is “pressure for an upward adjustment” to electricity bills for June.

“This is expected to be driven by reserve market settlement costs and the increase in FIT-All that will resumeFon customers’ bills this month,” he said.

Last month, the Energy Regulatory Commission (ERC) ordered the partial lifting of the suspension of settlement amounts in the reserve market.

The ERC has authorized the settlement of 30% of amounts due on reserve market transactions during the billing month of March. Citing simulations, the regulator projected that the partial payments would be worth P1.7 billion.

Meralco said the National Grid Corp. of the Philippines (NGCP) “can start recovering costs on trade transactions made on the reserve market in March.”

The NGCP has said that ancillary services to distribution companies could increase by more than 10 centavos per kilowatt hour (kWh).

NEW FIT-ALL RATE
Meanwhile, Meralco said the ERC recently approved a new FIT-All this month, which would result in an increase of P0.0474 per kWh.

“The increase was based on the application of Transco (National Transmission Corp.) as manager of the fund and ERC’s determination of the financing requirement to pay for the electricity supplied by RE (renewable)-FIT plants,” ERC Chairman and Chief Executive Officer Monalisa C. Dimalanta said in a Viber message.

Ms. Dimalanta said the ERC approved a FIT-All rate of P0.0838 per kWh in March, which reFstated in the June invoice.

“The implementation of the new FIT-All is higher than the rate of P0.0364 per kWh in 2022,” Ms. Dimalanta said.

The FIT-All is a fee reflected in consumer bills and collected from customers on the electricity grid to support the development and promotion of sustainable energy.

Payments are transferred to the FIT-All fund established and managed by Transco, which holds the funds with a government financial institution. The fund will go towards paying RE developers who have been offered fixed rates for the electricity generated by their projects.

The ERC had lifted the suspension of FIT-All collection from February due to an expected theFin the FIT-All fund.

Mr. Zaldarriaga also said there is upward pressure in generation charges due to continued tight supply conditions in the Luzon grid.

“We have had a series of red and yellow alerts over the past month, and as we know these conditions are oneF“defective generation costs, especially in the Wholesale Electricity Spot Market or WESM,” he said.

As of June 3, the Luzon network was placed under red and yellow alerts for 13 days and 29 days respectively this year.

In an advisory early Monday, the NGCP issued a yellow alert for Luzon’s power grid from 1 p.m. to 4 p.m. and 6 p.m. to 10 p.m. as a total of 2,692.8 MW was unavailable to the power grid.

Meralco said the depreciation of the peso is also expected to increase generation costs in JuneFaffects a significant portion of the costs of independent power producers and power supply agreements.

On Thursday, the peso fell to a nearly 19-month low, closing at P58.635 per dollar from P58.42 FThis was evident from data from the Bankers Association of the Philippines on Wednesday.

In May, Meralco increased the overall rate by P0.4621 to P11.4139 per kWh from P10.9518 per kWh in April due to higher generation costs.

Households that consumed 200 kWh had to pay about P92 more for their monthly bill.

Meralco’s controlling stakeholder, 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 through the Philippine Star Group, which it controls. — SJTalavera