Customers of Manila Electric Company (Meralco) will not experience relief in their electric bills this month, as the utility firm’s overall tariff will go up by P0.3297 per kWh to P10.2769 per kWh from last month’s P9.9472 per kWh.
That upward adjustment will then result in overall increase of P66 in the electric bills of end-users in the typical 200-kWh consumption bracket.
According to Meralco, “this month’s overall rate increase was mainly due to the completion of a distribution-related refund equivalent to P0.4669 per kWh for residential customers.”
To recall, there had been three sets of cost paybacks enforced by the company – and that summed up to P1.3340 per kWh for residential customers. In the past months, that had been a source of cost reduction in the overall rates being billed by the company.
The first set of refund ended this December; and two more mandated refunds will be carried out in the Meralco bills – one will end by January 2023; and the last one in May 2023.
Meralco noted that the generation charge component in the rates had been down this billing cycle by P0.1942 to P6.7975 per kWh from P6.9917 per kWh a month ago.
Conversely, it emphasized that the transmission charge to be passed on for residential end-users had escalated by P0.0753 per kWh “due to higher ancillary service charges of the National Grid Corporation of the Philippines.”
Meralco added that while there had been reduction of P0.2079 per kWh on its cost of procurement from power supply agreements (PSAs); as well as the P1.3985 per kWh downtrend in prices at the Wholesale Electricity Spot Market (WESM); there was a counterbalance to that due to the P0.0545 per kWh hike in purchases of supply from contracted independent power producers (IPPs).
It specified that the PSA charges declined following the re-synchronization of the San Gabriel plant of First Gen Corporation following the completion of its scheduled maintenance shutdown; and that was complemented by the appreciation of the Philippine peso’s value versus the US dollar.
The downswing in spot market prices, on the other, had been mainly traced “to improved supply situation in the Luzon grid,” – despite the fact that the daily average of capacity outages still hovered at the scale of 3,900 megawatts.
By far, Meralco explained that the unavailability of capacities had been offset by “the reduction in both peak and average demand in the November supply month,” hence, that “resulted in fewer impositions of the secondary price cap, which was triggered only 21-percent of the time in November versus October’s 52-percent.”
For the IPPs, the hike in charges had been partly attributed to the scheduled outage of the two modules (units 10 and 40) of the Santa Rita gas-fired power plant of First Gen.
“The peso’s appreciation tempered the increase in the IPP rate, as 98-percent of IPP costs were dollar-denominated,” the utility firm expounded.
The power firm’s supply sourcing last month had been mainly from its PSAs with a lion’s share of 52-percent; followed by its contracted IPPs with a share of 41-percent; and the balance of 7.0-percent from the spot market.