Power utility giant Manila Electric Company (Meralco) is anticipating probable increase in power rates to be passed on to its customers in the January bills.

The power firm said there had been lower demand in Luzon grid within December supply month, hence, the fixed cost component in the electricity tariffs will have to be divided across leaner volumes, hence, the upward adjustment effect.

“Initial data suggests that generation costs for January may have a possibility of an increase due to lower demand in the Luzon grid,” Meralco Vice President and Spokesperson Joe Zaldarriaga said.

He expounded that peak demand in the biggest power grid of the country had been reduced to 9,634 megawatts in December, or about 252MW lower from the previous supply month’s 9,886MW.

“This means that the fixed costs from power suppliers may be spread over lower energy volume resulting in higher effective rate to consumers,” Zaldarriaga pointed out.

The power utility firm is scheduled to announce its adjusted tariffs by Friday this week, with it emphasizing that it is still waiting for final billings from suppliers.

Zaldarriaga qualified the company is also looking at other factors that may have overall effect in the January pass-on rate, primarily the recent approvals rendered by the Energy Regulatory Commission.

It has to be noted that the regulatory body approved the refund of over-recoveries as well as collection of under-recoveries incurred by Meralco on the various rate components it has been passing on in the electric bills.

The ERC similarly granted a higher feed-in-tariff allowance (FIT-All) that shall be reflected in the bills starting this January – hiked from P0.0495 per kilowatt hour (kWh) to P0.0983 per kWh.

Zaldarriaga nevertheless emphasized that “despite the potential increase in January, the overall power rate decrease since the start of 2020 is still already at more than P1.00 per kWh.”

Various components in the electric bills move on a monthly basis, primarily the generation charge which accounts for the bulk, but the regulated distribution charge of Meralco cannot be adjusted without prior approval from the ERC. It may also come as a continuing relief to consumers that Meralco’s disconnection of power services – for those with unpaid bills – had been extended up to end-January this year.