Residential customers of Manila Electric Company (Meralco) will have to bear higher electric bills this month as the utility firm’s tariff had gone up by P0.5363 per kilowatt hour (kWh) or aggregate P107.26 for those in the 200-kilowatt consumption threshold.

According to the power company, the rate hike had been attributed mainly to the upswing in generation charge due to surging fuel prices in the world market chiefly for coal, which is the dominant fuel in the country’s power mix, and the liquid fuel which had been alternately fed to the gas plants due to production restriction at the Malampaya field.

The uptick in generation charge drove up Meralco’s overall rate to P10.1830 per kWh in this April billing cycle from the month-ago level of P9.6467 per kWh.

For other cost components, such as transmission charge and taxes, Meralco said that the ancillary services procurement of National Grid Corporation of the Philippines (NGCP) just logged slight upward adjustment of P0.0071 per kWh. Taxes and other charges posted a net increase of P0.1305 per kWh.

Meralco Vice President Lawrence S. Fernandez indicated that the April 2022 pass-through costs for generation charge had been reduced on the directives of the Energy Regulatory Commission (ERC) and the balance at equivalent P0.15 per kWh monthly will be added in the May, June and July electric bills.

The three-month staggered recovery amounted to P1.245 billion or a total of P0.45 per kWh to be reflected in the bills in the next three months.

He added that the calculated cost deferment had not factored in yet the P500 million charges that were not also fully passed on in the March electric bills; hence, those will likewise be integrated in the billing cycles in the coming months.

For the generation charge, in particular, it was noted that this had gone up by P0.3987 per kWh to P5.8724 per kWh this April from last month’s P5.4737 per kWh; and the main driver to it had been the higher settlement prices at the Wholesale Electricity Spot Market (WESM) and the increase in charges of its contracted independent power producers (IPPs).

As qualified by Atty. Jose Ronald V. Valles, head of regulatory management of Meralco, “this month’s generation charge increase would have been significantly higher, but Meralco coordinated with the ERC and some of its suppliers to again defer collection of portions of their generation costs to cushion the impact on the customers’ bills.”

He specified that beyond the new deferred generation charges from its power suppliers amounting to P945 million, there had been additional P300 million worth of generation costs also ordered by the ERC to be stretched for recovery in the other months; hence, that brought down the generation cost pass-on this month by about P0.11 per kWh.

Meralco said the billings of its contracted IPPs significantly climbed by P1.4885 per kWh, “mainly due to the scheduled maintenance of the Quezon Power plant that lasted until March 24; and the higher fuel costs of the First Gas-Santa Rita plant.”

The utility firm explained that “the Malampaya facility’s continued failure to supply sufficient natural gas resulted in Santa Rita utilizing expensive liquid fuel to ensure continuous supply.”

Additionally, Meralco stressed that “the peso depreciation against the US dollar contributed to the increase in IPP charges, since around 97-percent of these costs are dollar-denominated.”

Conversely, the factor that provided counterweight to the upticks in WESM and the IPP billings had been the P0.1068 per kWh decline in the charges of the power supply agreements (PSAs), although that had just been softened because of the deferral in the generation costs.

The supply portfolio of Meralco last month had been dominated by its procurements from PSAs with private generators with 51.6-percent share; followed by its contracted IPPs with 31-percent fraction in the pie; and the balance of 17.4-percent had been from the spot market.