Meralco hikes power rate for July

Residential customers of Manila Electric Co. (Meralco) will be slapped with a higher power rate this month largely due to the depreciation of the peso against the US dollar and they could expect this to be accompanied by increases in the prices of consumer goods.

Following rate reductions over the two previous months, Meralco on Friday said overall charges would go up by 31.36 centavos per kilowatt-hour this month. That means a typical residential customer who consumes 200 kWh monthly would pay an additional P63 in July.

The utility giant’s overall billing for July will rise to P10.1925 per kWh from P9.8789 per kWh in June, a 3.2-percent increase.

“The higher July rate is mainly due to the (28.23-centavo) per kWh increase in generation charge,” the company said, adding that a large portion of the supply is paid in dollars.

The generation charge went up from P4.9828 per kWh in June to P5.2651 per kWh.

A big chunk of the generation rate hike comes from independent power producers (IPPs) that are charging 35.73 centavos more per kWh.

Smaller supply

The power distributor said it would be getting a lesser supply from the IPP power plants this month—38 percent down from 40 percent

in June.

Although there would be a reduction in the power supplied by the IPPs, Meralco said 96 percent of their charges were US dollar-denominated.

According to the Bangko Sentral ng Pilipinas, the currency exchange rate averaged P53.048 against the dollar in June, weaker than the P52.195:$1 in May. The peso weakened further in the first week of July, averaging P53.39 to the dollar.

Weakened peso

The weakened peso also jacked up costs from power supply agreements (PSAs) by 15.13 centavos per kWh.

Meralco said it was sourcing about half of this month’s supply through PSAs, 63 percent of which are dollar-denominated.

“Charges from the Wholesale Electricity Spot Market (WESM) also increased by (70.39 centavos) per kWh,” the company said.

New record high

Meralco noted that electricity demand in Luzon, its customer base, reached a new record high of 10,876 megawatts in late May. The high demand persisted in June.

The company’s customers account for 55 percent of the electricity demand of the entire country.

Meralco said transmission charges to residential consumers would not change while taxes and other charges would increase by 3.09 centavos per kWh.

“Meralco’s distribution, supply and metering charges, meanwhile, have remained unchanged for 36 months, after these registered reductions in July 2015,” the company said.