The Manila Electric Company (MERALCO) is announcing an upward adjustment of Php 0.0327 per kilowatt (kWh) in the electricity rate this August, which brings the overall rate to Php 11.6339 per kWh, up from last month’s Php 11.6012 per kWh.
This meant that for residential customers utilizing 200 kWh, the adjustment would be around Php 7 in their total electricity bill.
The recent increase in residential transmission charges by Php 0.1086 per kWh is attributed to higher costs imposed by the grid operator, National Grid Corporation of the Philippines (NGCP), for ancillary services. These services, which include reserves crucial for ensuring grid stability, have led to the adjustment in this month’s billing.
The increase in transmission charges outweighed the Php 0.0503 per kWh decrease in generation charges.
Additionally, ancillary services costs surged by about 50% due to higher charges for contingency and dispatchable reserves.
The charges in the Power Supply Agreement (PSA) also saw an increase of Php 0.0421 per kWh because of an increase in fuel-related expenses.
Meanwhile, charges from Independent Power Producers (IPPs) decreased by Php 0.2974 per kWh, driven by higher IPP dispatch and the appreciation of the Peso, which impacted approximately 97% of IPP costs that are dollar-denominated. This reduction was sufficient to more than counterbalance the rise in Malampaya natural gas prices after its quarterly repricing.
The Wholesale Electricity Spot Market (WESM) experienced a reduction in prices, influenced by a significant 690 megawatts (MW) decline in Luzon’s average peak demand. The frequency of triggering the secondary price cap dropped to 2.3% in July, compared to 6.6% in the prior period.
Despite this, the effective WESM charges for the month saw a Php 0.5940 per kWh increase, largely attributed to the addition of the third installment of deferred May WESM costs, as directed by the Energy Regulatory Commission (ERC).
In other developments, MERALCO is alerting customers to a potential increase in generation costs linked to the use of Malampaya gas at First Gas’s Sta. Rita and San Lorenzo plants.
Following the expiration of the previous Gas Sale and Purchase Agreement (GSPA) in July, the San Lorenzo plant’s gas supply is now regulated under a new GSPA with the Malampaya Consortium, mirroring the arrangement for the Sta. Rita plant. Despite this change, the pricing formula from the old GSPA continues to be used until the new agreement receives regulatory clearance.
