The Manila Electric Company (MERALCO) has announced an upward adjustment of P0.6436 per kilowatt-hour (kWh) in electricity rates this June, which increased to Php 12.0575 per kWh from last month’s Php 11.4139 per kWh.
For residential customers using 200 kWh, the adjustment translates to an increase of approximately Php 129 in their total electricity bill.
MERALCO explained that higher costs from the Wholesale Electricity Spot Market (WESM) brought about the increase, with generation charge reaching P0.3466 per kWh.
“The increase in the generation charge this month would have been higher but MERALCO took the initiative to cushion the impact of the higher pass-through costs to our customers with the help from some of our suppliers which deferred the collection of portions of their generation costs,” said MERALCO Senior Vice President and Head of Regulatory Management Office Atty. Jose Ronald V. Valles.
On June 5, 2024, MERALCO, together with Quezon Power (Philippines) Ltd., San Buenaventura Power Ltd. Co. (SBPL), and South Premiere Power Corporation (SPPC), wrote to the Energy Regulatory Commission (ERC) to postpone the collection of Php 500 million in generation costs, resulting in a P0.1313 per kWh reduction in this month’s generation charge.
As approved by the ERC, the Php 500 million would instead be billed as a staggered payment, equally, and without interest in the upcoming three months.
The commission had also directed MERALCO to calculate the generation charge based on the Independent Market Operator of the Philippines’ (IEMOP) Final Statement for WESM charges.
Meanwhile, a P0.0224 per kWh increase in Independent Power Producer (IPP) rates was also seen, net of delayed production costs. This increase was caused by a lower average IPP dispatch and Peso devaluation, which affected approximately 98% of IPP costs denominated in dollars.
The reduction of P0.2988 per kWh in charges from PSAs, subsequent to the deferral of a portion of generation costs and reduced fuel expenditures of SPPC, which are covered by its emergency PSA and SBPL for 2024, mitigated the increase in the generation charge.
The transmission charge also experienced a rise of P0.1450 per kWh, attributed to increased ancillary service fees resulting from the ERC’s directive to partially settle 30% of the total reserve trading amount across all WESM trading transactions during the March 2024 supply period.
Additionally, the ERC has greenlit a revised Feed-in Tariff Allowance (FIT-All) rate set at P0.0838 per kWh starting June 2024, marking a significant increase from the prior rate of P0.0364 per kWh, revealing an upward adjustment of P0.0474 per kWh.
