Meralco office. INQUIRER FILE PHOTO/EDWIN BACASMAS
MANILA, Philippines — Overall electricity rates at the household level are tipped to decline this month, according to power distributor Manila Electric Co. (Meralco).
“Though we have yet to finalize the final figures, indications point to overall lower power rates this month mainly for two reasons,” said Joe Zaldarriaga, Meralco vice president and head of corporate communications. “We see both lower generation and transmission charges.”
The Meralco executive said initial estimates show the cost of natural gas suppliers to decline partly due to lower liquefied natural gas prices.
READ: Meralco hikes electricity rate by 2.29¢ per kWh for March
The transmission charge is also expected to decrease after the Energy Regulatory Commission (ERC) suspended the billing and settlement in the reserves market “that drove the significant increase in ancillary service charges in the March electricity rates,” he added.
The regulatory agency issued the directive to the Philippine Electricity Market Corporation and the Independent Electricity Market Operator of the Philippines (Iemop).
Service charges suspended
The suspension order covers the March 2024 billing period and will be in place until the ERC finalizes its evaluation of the Price Determination Methodology used by Iemop, likely in May this year.
In March, Meralco raised the overall rate for a typical household by P0.0229 per kilowatt-hour (kWh) to P11.9397 per kWh.
The power firm attributed the price hike to the increase in transmission charges, which offset the decline in generation charge.
The generation charge, accounting for more than half of a consumer’s monthly bill, refers to the cost of purchasing power from suppliers while transmission charge pertains to the cost of delivering electricity from power generating facilities to transmission lines.