Electricity rates are going up this July for customers of the Manila Electric Co. (Meralco), with higher fuel costs and a weaker peso pushing up the price of power supply.
Meralco on Friday announced a P0.4883 per kilowatt hour (kWh) increase in overall rates, raising the July charge to P12.6435 per kWh from P12.1552 last month.
For a typical household consuming 200 kWh, that means an additional P98 in this month’s electricity bill.
The higher rate is mainly due to a jump in the generation charge, which rose by P0.3407 per kWh.
The cost of electricity from Meralco’s power suppliers rose this month, with charges from Power Supply Agreements (PSAs) and Independent Power Producers (IPPs) up by P0.4476 and P0.4992 per kWh, respectively.
The company said the hikes were driven by higher fuel prices and the peso’s depreciation against the US dollar, which affected fuel imports and generation costs.
PSAs are long-term contracts with power producers, while IPPs are usually private power firms that sell electricity directly to Meralco. Both pass on costs related to fuel and foreign exchange, which have lately been going up.
Specifically, PSA charges increased, while IPP charges rose mainly due to higher fuel prices and a weaker peso versus the US dollar.
Meralco said the generation rate would have been even higher if not for a P0.1703 per kWh drop in charges from the Wholesale Electricity Spot Market (WESM), which reflected lower average demand on the Luzon grid.
Other components of the July bill also saw modest increases. The transmission charge firmed by P0.0734 per kWh, driven by higher reserve costs. Taxes and other charges posted a net increase of P0.0742 per kWh.
The utility company emphasized that it does not earn from generation or transmission charges, which are remitted in full to power suppliers and the grid operator. Taxes and other regulatory fees are also passed through to government.
Meralco’s earnings come only from distribution, supply and metering charges, which remain unchanged at P1.3522 per kWh. A continuing distribution-related refund of P0.2024 per kWh also still applies to residential customers.
For July, Meralco’s energy mix will be sourced from Power Supply Agreements (56 percent), Independent Power Producers (28 percent) and WESM (16 percent).
Meralco serves all major cities in Metro Manila, as well as parts of Bulacan, Cavite, Rizal, Laguna, Batangas, Quezon Province and Pampanga.
