MERALCO says May’s electric bill will increase due to a higher generation charge

meralco logo electric post

The Manila Electric Company (MERALCO) will implement an increase of Php 0.4621 per kilowatt hour (kWh) in the May electricity rate, after a considerable decrease of almost one peso in April.

From Php 10.9518 per kWh in April, the average household’s total rate increased to Php 11.4139 per kWh. This is equivalent to a Php 92 increase in the total electricity bill of a 200 kWh household.

This increase was due to the hike in generation charge of about Php 0.4455 per kWh as a result of augmented prices in the Wholesale Electricity Spot Market (WESM) and Power Supply Agreements (PSAs).

Meanwhile, alleviating the increase in the generation charge was a reduction in charges from Independent Power Producers (IPPs) of around Php 0.6942 per kWh, due to higher average IPP dispatch and lower fuel prices.

However, charges from WESM had soared by Php 1.7913 per kWh as the supply conditions tightened in the Luzon grid during the April supply month. The demand had also soared to 2,401 MW and “there were three (3) days with Yellow Alerts and five (5) days with Yellow/Red Alerts from normal conditions the previous supply month.”

Furthermore, the secondary price cap was activated 19% of the time in April, compared to just 7% the month before.

Meanwhile, charges from PSAs also increased to Php 0.2871 per kWh due to reduced excess energy deliveries. Charges from an emergency PSA were incurred to cover MERALCO’s supply requirements while awaiting regulatory approval after a series of Competitive Selection Processes (CSPs).