The Manila Electric Company (MERALCO) has recently announced a rate adjustment for June, with an increase of Php 0.4183 per kWh in the electricity rate. As a result, the overall rate for regular households will rise to Php 11.9112 per kWh from the previous rate of Php 11.4929 per kWh last month.
Residential customers with a monthly consumption of 200 kWh will experience an increase of around Php 84 in their total electricity bill.
The rate increase for this month is a result of the final distribution-related refund completed in May, amounting to Php 0.8656 per kWh for residential customers. The impact of this refund will be reflected in the electricity bills for June.
When asked to clarify if the electricity rate did not actually increase but only normalized, Meralco’s spokesperson and vice president for corporate communications, Joe R. Zaldarriaga, confirmed that the electricity rate normalized, with a reduction in the generation costs.
“Yes, that is correct. I mentioned even before that in terms of the generation cost, there actually was a reduction in terms of the power rates. Ang nawala, was that separate line item in the bill pertaining to the DRTU or the Distribution Rate-True Up,” Zaldarriaga said.
From March 2021 to May 2023, Meralco issued four Distribution Rate True-Up (DRTU) adjustments totaling Php 48.3 billion, which translates to a refund of approximately Php 1.8009 per kWh for residential customers.
“These refunds benefitted Meralco’s customers over the past two years as these helped temper increases in electricity bills at a time of financial distress and uncertainty for many,” Meralco Head of Regulatory Management Office Atty. Jose Ronald V. Valles shared.
Generation charges decreased by Php 0.4195 per kWh, bringing the rate from Php 7.6697 per kWh in May to Php 7.2502 per kWh in the current month. The decline in costs was attributed to lower expenses associated with Meralco’s Power Supply Agreements (PSAs) and Independent Power Producers (IPPs).
PSA charges decreased by Php 0.5871 per kWh, while IPP charges decreased by Php 0.5854 per kWh. These reductions were attributed to improved average plant dispatch and lower coal prices.
These mitigated the Php 2.0187 per kWh increase in Wholesale Electricity Spot Market (WESM) charges, which was driven by tight supply conditions in Luzon. In May, peak demand reached 12,431 MW, marking a record high. Additionally, the grid experienced Yellow and Red Alerts on May 8.
During the period, PSAs accounted for 50% of Meralco’s energy requirements, while IPPs contributed 38%. On the other hand, the share of energy obtained from the Wholesale Electricity Spot Market (WESM) was lower at 12%.