Budgets for electricity bill payments will come heavier on the pockets of Manila Electric Company (Meralco) customers as its overall tariff had escalated by P0.4201 per kilowatt hour (kWh) in its October billing cycle to P11.8198 per kWh vis-à-vis P11.3997 per kWh last month.

For its subscribers in the typical usage band of 200-kWh, the overall increase in their bills would be P84; while those with 300kWh consumption will have at least P126 spike in their overall bill.

The generation charge, which accounts for the biggest component of the pass-on costs of the utility firm, had climbed by P0.3015 to P7.1267 per kWh as against P6.8252 per kWh in September; and that was mainly traced to “higher charges from independent power producers (IPPs) and power supply agreements (PSAs).”

On the other line items, it was announced by Meralco that the transmission charge of system operator National Grid Corporation of the Philippines (NGCP) had gone up by P0.0264 per kWh, mainly due to higher charges for ancillary services that it had to procure to ensure the reliable operations of the country’s power grids.

Further, taxes and other charges went up by P0.0661 per kWh corresponding to the rise also in the generation and transmission charges in the electric bills.

For the generation charge, in particular, Meralco explained that “charges from the IPPs increased by P0.4599 per kWh mainly due to higher cost of fuel utilized by the First Gas plants..”

The power firm qualified that “the persisting supply restriction of the Malampaya natural gas field compelled the 1,000-megawatt First Gas-Sta. Rita and 500 MW First Gas-San Lorenzo power plants to switch to more expensive alternative fuel to ensure supply continuity.”

On supply procurements via its PSAs, Meralco emphasized that there was also an uptick of P0.1658 per kWh -- and that was similarly attributed to the forced shutdown of the 420MW San Gabriel power plant due to the gas supply restriction from the Malampaya field.

Meralco expounded that “lower coal prices abated the increase in PSA charges,” otherwise, the escalation on its overall pass-on costs would have even been higher.

According to the utility firm,  the implementation of its second emergency power supply agreement (EPSA) with South Premiere Power Corporation (SPPC) of the San Miguel group – which covers 330MW of baseload capacity -- somehow eased its exposure to the spot market.

The SPPC power supply contract replaces an earlier terminated contract for capacity drawn from the Sual power plant, which is also under the trading control of the San Miguel group.

Meralco noted that the P0.0525 per kWh jump in the charges of the Wholesale Electricity Spot Market (WESM) partly reinforced the overall hike in Meralco’s rates this month.

“The supply situation in the Luzon grid improved last September as average demand and average capacity on outage were both lower, by around 165 MW and 315 MW, respectively,” the utility firm stressed.

The company’s level of spot market exposure last month had been at 18%  for its supply portfolio; while capacities procured from IPPs accounted for 35-percent; then the bulk of its supply pie came from PSAs  with 47% share.

The universal charge line item in the electric bills had likewise been higher by P0.0261 per kWh – that was following an earlier decision of the Energy Regulatory Commission (ERC) enforcing an increase in the universal charge for missionary electrification (UCME) at P0.2238 per kWh versus P0.1977 per kWh previously; while the feed-in-tariff allowance (FIT-All) charge remains suspended.