Meralco rates up in September

Metro Manila (CNN Philippines, September 8) — The Manila Electric Company (Meralco) has announced an increase in its power rates this month, saying higher fuel costs and a weaker peso raised the generation charge.

Meralco said Thursday its customers will have to shell out ₱0.3907 more per kilowatt-hour (kWh) this September – or ₱9.9365 per kWh from ₱9.5458 in August.

This means an additional payment of ₱78 per 200 kWh.

The hike comes after the company’s rates went down in the past two months, with a combined reduction of ₱0.9154 per kWh.

Meralco said the increase is due to a higher generation charge, which rose by ₱0.3581 to ₱6.9393 per kWh.

The generation charge covers the cost of power purchased by the company from its suppliers, such as independent power producers (IPPs), power producers with power supply agreements (PSAs), and the wholesale electricity spot market (WESM).

This charge accounts for 55% of one's electric bill. Meanwhile, 17.5% goes to Meralco, based on a breakdown provided by the firm.

Meralco explained charges from IPPs and PSAs climbed by ₱0.8026 and ₱0.3316 per kWh, respectively, partly due to fuel price hikes.

It said the ongoing Malampaya gas supply restriction necessitated the increased use of more expensive alternative fuel to ensure continuous supply.

It also said that the Philippine peso’s depreciation against the US dollar was another reason, since 98% of total IPP costs and 36% of PSA costs are dollar-denominated.

Just this Wednesday, the peso closed at ₱57.135 against the US dollar, surpassing the record ₱57 low posted the day before.

“The continued rise in international coal prices also contributed to the PSA rate increase,” Meralco said.

Taxes and other charges – which make up 17.4% of the electric bill – also registered a net increase of ₱0.0758 per kWh.

Meanwhile, the company noted that the higher PSA and IPP costs were partly mitigated by lower charges from the WESM – or a reduction of ₱3.7473 per kWh – as the supply situation in the Luzon grid improved.

Transmission charge for residential customers – which accounts for 10.1% of the bill – also decreased by ₱0.0432 per kWh due to lower ancillary service charges.