Meralco increases power rate for June | Inquirer News

Meralco increases power rate for June

AT PEOPLE’S ACCOUNT A lineman inspects electric meters in Metro Manila as the country continues to suffer from inequities in the country’s power industry. —FILE PHOTO

A lineman inspects electric meters in Metro Manila. —FILE PHOTO

Power distributor Manila Electric Co. (Meralco) announced on Friday another rate increase of P0.4183 per kilowatt-hour (kWh) for the June billing period, bringing a typical household’s overall electricity rate to P11.9112 per kWh from P11.4929 per kWh in May.

Residential customers consuming 200 kWh a month can expect a hike of around P84 in their total bill, according to Meralco.


Meralco also announced that electricity rates have “normalized” after a series of distribution-related refunds ended last month.


“In terms of generation, there actually was a reduction in terms of power rates. Customers will no longer find a separate line item on the distribution-related refund this month,” said Joe Zaldarriaga, vice president and head of corporate communications of Meralco.

He was referring to the final tranche of the distribution rate true-up—adjustments equivalent to P0.8656 per kWh—or P173.12 for a household consuming 200 kWh a month—that it had been implementing since March 2021.


Meralco said the refund eased recent electricity rate hikes “at a time of financial distress and uncertainty for many.”

“We were able to somehow cushion the full impact of the 87 centavos because of lower charges from power generators,” Zaldarriaga said.

Generation charge, or the cost of power purchased from suppliers that accounts for more than 50 percent of a customer’s total monthly bill, cushioned the impact of this month’s rate increase.

Generation charges declined by P0.4195 per kWh, bringing down the total to P7.2502 per kWh this month from P7.6697 per kWh in May.

This was on the back of Meralco lessening its dependence on supply coming from the Wholesale Electricity Spot Market (WESM) to 12 percent of its total power requirements from the previous 18 percent.

Tight supply According to Meralco, spot market charges soared by P2.0187 per kWh due to tight supply in the Luzon grid.

Peak demand in the power-hungry grid reached a historic high of 12,431 megawatts on May 9, following the red and yellow alerts raised in the island group.

This triggered the imposition of the secondary price cap 28.28 percent of the time, compared to only 22.16 percent the previous month.“Just like any market, WESM is affected by the supply and demand situation. Peak demand soared in May, which was anticipated because of the summer season,” said Larry Hernandez, head of utility economics of Meralco.

But the higher spot market charges were mitigated by a decline in charges from Meralco’s power supply agreements and independent power producers, which went down by P0.5871 per kWh and P0.5854 per kWh, respectively.

Transmission and other charges also registered a net decrease of P0.0278 per kWh.

In May, higher generation charges triggered an increase in Meralco’s electricity rate by P0.1761 per kWh.

The power firm also included in May the final installment of deferred generation costs equivalent to 20 centavos per kWh.

Earlier this year, Meralco said it would defer around P1.1 billion in total March generation costs, staggering the collection until the May billing period to cushion the impact of the rate increase on its 7.6 million customers.

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READ: Meralco hikes rates for 3 straight months

TAGS: Electricity, electricity bill, MERALCO, power rate

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