Meralco hikes generation charge during dry season

Meralco office. STORY: Meralco hikes generation charge during dry season

Meralco office. (INQUIRER FILE PHOTO)

MANILA, Philippines — The Manila Electric Co. (Meralco) announced on Wednesday that it may raise the generation charge by P0.92 per kilowatt-hour starting this month until May to recover P1.1 billion in generation costs due to the Malampaya shutdown.

According to the Energy Regulatory Commission (ERC), a typical household consuming 200 kWh may expect a total rate increase of P1.11 per kWh once other billing components are included, such as taxes and system loss charge.

Meralco said that it had proposed to the ERC that the increase be implemented on a staggered basis to help cushion the impact on millions of customers.

In a Viber message, the power distributor said that a P0.52 per kWh generation charge hike may take effect this month. This will be raised to P0.62 per kWh once taxes and system loss are taken into account. The remaining P0.40 per kWh increase would be spread out in April and May.

“The total deferred generation costs of P1.1 billion, equivalent to 40 centavos per kWh, will be collected on a staggered basis in the April and May billing periods as cleared by the regulator,” it added.

Generation charge refers to the cost of purchased power from suppliers and accounts for more than 50 percent of the total electricity bill.

May still increase

Meralco clarified, however, that the total power rate increase for March — which would include other billing components, such as transmission charge — has yet to be finalized.

The company informed the ERC earlier this week that it wanted to implement a deferred collection of around P1.1 billion in generation charges for the months of January and February.The two-week shutdown of the Malampaya gas field largely influenced the increase, Meralco said, as it forced two power plants to use “more expensive” alternative fuels to ensure continuous power supply.

It added that higher prices in the spot market further contributed to the expected increase in generation charge.

In February, Meralco reduced its electricity rate by P0.0106 per kWh.

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