Meralco hikes February rates over higher fuel costs
MANILA, Philippines — Consumers will again see higher electricity rates this month after distributor Manila Electric Co. (Meralco) announced on Thursday an increase of P0.5738 per kilowatt-hour (kWh) over higher fuel costs due to the looming summer season.
This brings the overall rate for a typical household to P11.9168 per kWh. Owners of households consuming 200 kWh may see an increase of around P115 in their electricity bills.
According to Meralco, charges from independent power producers (IPP) and power supply agreements went up. These were reflected in the generation charge or the cost of power purchased from suppliers, which accounts for more than 50 percent of the total bill.
Generation charge per kWh rose to P7.1020 from P6.6468 as two natural gas-fired power plants imported more fuel.
Peso depreciation likewise contributed to the increase in IPP charges, which Meralco said were 96 percent dollar-dominated.
Meralco spokesperson Joe Zaldarriaga explained that demand would further climb in March with the start of the dry season.
“Meralco will ensure that we can meet the increase in demand, especially since we’ve already contracted suppliers for additional capacity to help cover our supply requirements,” he said.
A subsidiary of conglomerate San Miguel Corp. was recently declared the best bidder in Meralco’s auction for 1,200 megawatts (MW) of capacity meant to meet growing demand amid the El Niño climate pattern.
San Miguel and Aboitiz-led companies also gave the best offers for a separate 1,800-MW supply requirement.
Fit-All collection back
According to Meralco, the resumption of the collection of Feed-in Tariff Allowance (Fit- All), a uniform P0.0364-per-kWh charge paid by consumers to incentivize renewable energy developers, led to the rate hike this month. The Electric Power Industry Reform Act of 2001 mandates financial incentives.
The Energy Regulatory Commission (ERC) lifted the yearlong suspension of Fit-All collection last month, warning of a “looming deficit” in the Fit-All fund.
ERC Chair Monalisa Dimalanta previously said that only P2.98 billion remained in the fund as of Jan. 5.
A total of P2.2 billion is paid monthly to renewable energy developers, thus prompting the regulator to resume Fit-All collection to replenish the fund.
Fit-All falls under Meralco’s “transmission and other charges,” which registered a net increase of P0.1186 per kWh.
At the same time, Meralco said a P0.4061-per-kWh decline in spot market charges “tempered” the overall increase, especially as supply in the power-hungry Luzon grid improved.
This marks the second consecutive month of power rate hikes.