The pass-on tariff of power utility giant Manila Electric Company (Meralco) will climb by a marginal P0.0229 per kWh in the March billing cycle, and that has been precipitated mainly by the ancillary services (AS) charges of the power system operator.

The slight hike in charges will drive up overall residential rates to P11.9397 per kWh this month from P11.9168 per kWh in February bills – and that will redound to aggregate increase of P5.00 for households in the 200-kilowatt hour (kWh) consumption base.

According to Meralco, the main trigger to this month’s upward adjustment in rates was “the P0.3976 per kWh increase in the transmission charge for residential customers due to higher ancillary service charges, which more than tripled this month and now account for around 52% of total transmission costs.”

AS charges reflect the costs of reserves being purchased by the National Grid Corporation of the Philippines (NGCP), so it could have sufficient power supply to back up the operations of the country’s power grid.

The utility firm emphasized that the escalation in AS charges had been offset by the P0.3518 per kWh downtrend in the generation charge; or the line item in the bills being passed on to the power suppliers.

Meralco Vice President and Head of Corporate Communications Joe Zaldarriaga explained that the earlier-projected rate cut had been reversed due to the “steep upward adjustment in the transmission charge,” and that in turn “effectively wiped out the reduction in generation charges causing a slight uptick in overall rates.”

As electricity supply tracks wobbly state within the stretch of the summer months, the company executive similarly reminded their 7.8 million customers “to continue practicing energy efficiency for better management of consumption, “ adding that usage would typically shoot up with scorching weather conditions.

The power firm further noted that procurement costs from the power supply agreements (PSAs) decelerated by P0.3045 per kWh “mainly due to lower energy payments for the South Premier Power Corp. (SPPC) emergency PSAs and the resumption of operations of the San Buenaventura Power Ltd. Co. (SBPL) power plant after undergoing scheduled maintenance.”

In addition, the billed charges of the utility firm’s independent power producers (IPPs) had gone down by  P0.1443 per kWh, after integrating reduced gas costs for capacities delivered from the Sta. Rita gas plant of First Gen Corporation.

As specified by Meralco, that decline in gas charges had been mainly attributed to the new gas sale and purchase agreement (GSPA) inked by the Lopez firm for indigenous gas being lifted from the Malampaya field. The GSPA is currently under review by the Energy Regulatory Commission.

The lower costs linked to the gas fed on First Gen’s Santa Rita plant  had been placed at P0.0447 per kWh in January; then P0.0866 per kWh in the February supply month.

Further, the charges invoiced by the operator of the Wholesale Electricity Spot Market (WESM) tapered off by  P0.1131 per kWh – and that had been primarily traced to the improvement in supply situation last month as reflected in the lower capacity outages of the power plants.

On the firm’s supply sourcing last month, capacity-deliveries from its PSAs accounted for 51%; while procurements from IPPs had been relatively tamed at 27%; and spot market exposure had 22% share in the pie.