Meralco hikes power bills in September
The Manila Electric Co. (Meralco) announced on Friday an increase of 50 centavos per kilowatt-hour (kWh) in consumers’ September bills, bringing the overall rate of a typical household to P11.3997 per kWh.
This translates to an increase of around P100 in the total electricity bill of a customer consuming 200 kWh.
Joe Zaldarriaga, spokesperson for Meralco, explained that the increase was driven mainly by a rise in generation charge, or the cost of power purchased from suppliers that accounts for more than 50 percent of the total monthly bill.
Generation costs went up by P0.4323 per kWh to P6.8252 per kWh as higher fuel prices and a weaker peso pulled up charges from power supply agreements (PSAs) and independent power producers (IPPs).
According to Meralco, PSA charges went up by more than a peso per kWh, while IPP charges rose by around 48 centavos per kWh.
Transmission charges, meanwhile, had a slight reduction of P0.0081 per kWh after National Grid Corp. of the Philippines stopped collecting its 3-percent franchise tax from consumers, as directed by the Energy Regulatory Commission (ERC).The franchise tax totals around 1 centavo per kWh.
Spot market charges also went down by P0.5034 per kWh due to reductions in adjustments and other charges, Meralco said.
Supply deal termination
However, Meralco head of utility economics Larry Fernandez explained that the recent termination of its 330-megawatt power supply deal with San Miguel Corp. unit Sual Power Inc. (SPI) contributed to the overall rate increase.
“We lost a lower-cost source of power, and we had to replace it [with] other sources. Unfortunately, those other sources, including the spot market, were more expensive than what was being supplied before by Sual Power,” Fernandez told reporters.
SPI terminated its PSA with Meralco in July after the Court of Appeals nullified a ruling by the ERC denying the rate hike petition jointly filed by the two companies.
Prior to the termination, SPI charged Meralco around P4 per kWh. Zaldarriaga noted that this was lower than the average P5 per kWh in the Wholesale Electricity Spot Market (WESM).This also resulted in Meralco sourcing 23 percent of its power requirements from WESM, as compared with only 17 percent the previous month.
In August, slow demand amid the rainy season pulled down Meralco’s electricity rate by P0.2908 per kWh.