Meralco blames rate hike on generation, transmission

Higher generation and transmission charges pulled up distributor Manila Electric Co.’s (Meralco) power rates in November by P0.2357 per kilowatt-hour (kWh), translating to an increase of P47 in the total electricity bill of customers consuming at least 200 kWh a month.

This brings the overall rate for a typical household to P12.0545 per kWh from P11.8198 per kWh in October.

Transmission charge, or the cost of delivering power supply to Meralco’s distribution system, went up by P0.1211 per kWh due to higher “ancillary service charges,” the company said on Thursday.

National Grid Corp. of the Philippines’ (NGCP) ancillary service charge for regulating reserves increased fourfold to P91.35 per kW. This accounts for 76.5 percent of total ancillary service charges.

The Energy Regulatory Commission has approved an additional 257.78 megawatts for regulating reserves under the new ancillary service procurement agreements.

NGCP spokesperson Cynthia Alabanza clarified that her company did not earn revenues from these pass-through charges.

Alabanza also explained that they had previously warned that the new policy could lead to an increase in the charges passed on to consumers.

Generation charge, or the cost of power purchased from suppliers that accounts for more than 50 percent of the total bill, went up by P0.0671 to P7.1938 per kWh on the back of higher charges from the spot market and independent power producers (IPPs).

Wholesale Electricity Spot Market charges increased by more than a peso per kWh due to tight supply in the power-hungry Luzon grid.

On Oct. 1, NGCP said a “grid disturbance” affected the San Jose-Nagsaag 500-kilovolt transmission line 2, leading to outages in “multiple power plants.”

This resulted in automatic load dropping, or power interruption due to abnormal grid conditions, affecting around 850,000 Meralco customers in Metro Manila and nearby provinces.

Charges from IPPs, meanwhile, went up by P0.1093 per kWh as prices in the Malampaya gas field went up.

Last month, higher generation charges also triggered an increase in Meralco’s electricity rate by P0.4201 per kWh, which translates to an upward adjustment of P84 in the total bill of a customer consuming at least 200 kWh.