Meralco hikes power rates in August

PHILIPPINE STAR/ MICHAEL VARCAS

RESIDENTIAL HOUSEHOLDS consuming 200 kilowatt-hours (kWh) will see an increase of around P19 in their electric power bills in August, after Manila Electric Co. (Meralco) raised rates on the back of higher transmission charges.

In a statement on Monday, Meralco said that the overall rate for August rose by P0.0965 per kWh to P9.0036 per kWh from last month’s P8.9071 per kWh, mainly due to the higher transmission fees.

Households consuming 300 kWh, 400 kWh and 500 kWh, will see an increase of P29, P39 and P48, respectively, in this month’s bills.

“This month’s rate is still lower than the pre-pandemic rate — when it settled at P9.5674 (per kWh) in August 2019 and P10.2190 (per kWh) in August 2018 — proof that the series of competitive biddings by Meralco resulted in lower electricity charges,” the utility giant said.

Meralco said that its transmission charge went up by P0.1331 per kWh to P0.7323 per kWh on higher ancillary service or reserve charges, which made up 36% of the grid operator’s total transmission charge.

Despite the rise in transmission charges, higher power rates in August were cushioned by the implementation of the distribution rate true-up refund.

“The refund rate for residential customers is at P0.2761 per kWh and appears in customer bills as a line item called ‘Dist True-Up,'” Meralco said.

The energy regulator previously approved Meralco’s proposal to refund around P13.9 billion over a 24-month period. This represents the difference between the actual weighted average tariff and the Energy Regulatory Commission’s approved interim average rate for distribution-related charges from July 2015 to November 2020.

Meralco also gave updates on its generation charge which inched up this month, after registering an increase of P0.0615 per kWh to P4.9322 per kWh.

However, the firm said the higher generation charge was offset by lower subsidies, taxes, and other fees, which decreased by P0.0981 per kWh.

Charges from the Independent Power Producers (IPPs) also went up by P0.7389 per kWh due to the continued depreciation of the peso, and higher natural gas prices from the offshore Malampaya field.

“The increase in IPP charges was mitigated by the decrease in charges of Power Supply Agreements (PSA) and the Wholesale Electricity Spot Market (WESM), which registered reductions of P0.0347 and P2.6903 per kWh, respectively,” Meralco said.

PSA charges slipped after plants operated by the Ayala-led AC Energy Corp. sold excess power at a discount. Meanwhile, WESM prices decreased in the second half of July on the back of improved operations of generating facilities and cooler temperatures.

PSA, IPP, and WESM accounted for 53%, 40.8%, and 6.2% of Meralco’s power requirements.

The distribution utility said that its distribution, supply, and metering charges have been unchanged for 73 months, after recording reductions back in July 2015.

It emphasized that it does not earn from generation and transmission charges, since these payments go to power suppliers and the National Grid Corp. of the Philippines, respectively.

Meralco also said it remits taxes, universal charges and the feed-in-tariff allowance to the government.

Shares of Meralco in the local bourse shed 2.17% or P6 to close at P270 each on Monday.

Meralco’s controlling stakeholder, Beacon Electric Asset Holdings, Inc., is partly owned by PLDT, Inc.

Hastings Holdings, Inc., a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc., which has interest in BusinessWorld through the Philippine Star Group, which it controls. — Angelica Y. Yang

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