Red Alerts likely to trigger increase in MERALCO July bill

NGCP station

The Manila Electric Company (MERALCO) will likely increase its generation charges this July due to tight power supply and simultaneous plant outages experienced by the Luzon Grid leading to the Red Alerts from May 31-June 2, as well as the Yellow Alert on June 4.

MERALCO Vice President and utility economics head Lawrence Fernandez said that the demand in the grid reached an all-time high of over 11,600 megawatts (MW), surpassing the pre-pandemic record of around 11,300MW in 2019.

Fernandez said that the high demand and tight supply that elevated prices in the Wholesale Electricity Spot Market (WESM) will, in turn, push up generation charges, which comprises the bulk of the monthly electric bill.

MERALCO gets a portion of its power supply requirement from the WESM, on a monthly basis.

Another possible factor, Fernandez said, is the depreciation of the peso and the ongoing restriction from the Malampaya gas field.

He said likewise that the secondary cap was triggered when high WESM prices were sustained for five days, which the Energy Regulatory Commission recently shortened to just three days.

Fernandez explained that buyers are exposed to high prices first before the cap was imposed and even then the secondary cap is Php6.245 per kilowatt-hour (kWh), which is still higher than the WESM prices in past months.

MERALCO’s power rates also slightly increased in June by Php8.6718/kWh for a typical household from Php8.5920/kWh in May.