Meralco rates up by P0.1055/kWh this September billing

Household budget for electric bills will be higher this month for customers of Manila Electric Company (Meralco), as it announced a tariff hike of P0.1055 per kilowatt hour (kWh) in the September billing cycle.


The utility firm emphasized that its overall pass-on rate this month will slightly climb to P9.1091 per kWh from the month-ago level of P9.0036 per kWh.

For end-users that are in the 200-kWh consumption bracket, the aggregate increase that they will experience in their bills would be P21, according to Meralco.

The power firm primarily attributed the rate hike to the escalation of the generation charge component of the pass-on costs, with it inching up by P0.1117 per kWh to P5.0439 per kWh from P4.9322 per kWh in the previous billing cycle. The generation charge accounts for about 55-percent of the overall billed rate.

Meralco indicated that subsidies, taxes and other charges likewise logged upward adjustment of P0.0458 per kWh; while transmission charge, mainly owing to the swing of ancillary services charges, had been down by P0.0520 per kWh.

On Meralco’s power supply procurements that pushed up the generation charge, it specified that “charges from the power supply agreements (PSAs) registered an increase of P0.2494 per kWh.”

The power company explained that “the reduction in demand brought about by the re-imposition of enhanced community quarantine in Metro Manila and neighboring regions led to lower excess energy deliveries, which are priced at discount” – primarily from the plants of South Premiere Power Corporation; San Miguel Energy Corporation and AC Energy Corporation.

The utility firm pointed out though that “despite the increase, power supply agreements remained Meralco’s lowest cost source of supply.”

Meralco’s supply sourcing from its contracted independent power producers (IPPs) had likewise been higher by P0.0955 per kWh in the last supply month “due to lower average plant dispatch,” and such had been attributed to forced outage of the 460-megawatt Quezon Power plant on August 18-22; then the scheduled shutdown of the San Lorenzo gas plant’s module 50, of 265-MW capacity, last August 16.

Another factor that had driven up the generation charge, the power firm said, had been the cost of fuel shift of the Santa Rita and San Lorenzo gas plants, as they were compelled to use “more expensive alternative liquid fuel for their continued operation, following the ongoing restriction of gas supply from Malampaya.” As further noted, “the cost of using liquid fuel is about twice that of using Malampaya gas.”

On the fraction of its supply purchased from the Wholesale Electricity Spot Market (WESM), Meralco highlighted that this was lower by P0.7504 per kWh.

But it also stated that “charges from the WESM would have further decreased by P0.5646 per kWh without the correction on the net settlement surplus (NSS) component in the July 2021 WESM bill, and the generation charge adjustment would have been only at P0.0553 per kWh.”

The utility firm said the bulk of its supply last month had been from its PSAs with a share of 53.2-percent; then from its contracted IPPs with 36.8-percent cut in the pie; and the balance of 10-percent from the spot market. ###