RESIDENTIAL CUSTOMERS in areas served by Manila Electric Co. (Meralco) will see higher electricity bills this month due to the increase in transmission costs.
In a statement on Wednesday, Meralco said the overall rate will increase by P0.1543 per kilowatt hour (kWh) to P11.7882 per kWh in September from P11.6339 per kWh last month.
Households using 200 kWh will see their monthly bills increase by approximately €31. Those who consume 300 kWh, 400 kWh and 500 kWh will have to pay an additional P46, P62 and P77 respectively.
“The driving force behind this month’s overall tariff adjustment is the P0.2913 per kWh increase in transmission charges for residential customers due to higher additional service charges following the resumption of commercial operations of the reserve market on August 5, 2024,” it said power distributor. .
Meralco said the total cost of ancillary services in the reserve market was double the cost of National Grid Corp.’s procurement agreements. of the Philippines (NGCP). The share of additional service charges in the NGCP transmission speed increased to more than 50%.
“Without the transmission fee increase, we could have gotten a reduction this month,” Meralco Vice President and Head of Corporate Communications Joe R. Zaldarriaga said in Filipino during a briefing.
Meralco said higher transmission costs had more than offset lower generation costs, which fell by P0.1547 per kWh.
The company attributed the decline in generation costs to the recent strength of the peso. The local unit closed at P56.11 per dollar on August 30, which was the “strongest level” since December 2023, according to Meralco.
Meralco said the peso’s appreciation affected 50% of the costs of power supply agreements (PSAs) and 97% of the costs of dollar-denominated independent power producers (IPPs).
This led to a reduction in PSA and IPP costs by P0.2371 per kWh and P0.0529 per kWh, respectively.
Wholesale Electricity Spot Market (WESM) costs also decreased by P0.0514 per kWh.
“This already took into account the last of four installments of deferred WESM charges from May 2024, previously ordered by the Energy Regulatory Commission (ERC),” the company said.
PSAs, WESM and IPPs accounted for 46.2%, 27.3% and 26.4% of the company’s total energy needs for the period.
Taxes and other charges increased by P0.0177 per kWh.
“Charges for generation and transmission are paid to the energy suppliers and the grid operator respectively, while taxes, universal charges and Feed-in Tariff Allowance (FIT-All) are all paid to the government,” Meralco said.
Distribution charges have remained unchanged at P0.0360 per kWh since August 2022.
POSSIBLE PRICE ADJUSTMENTS
Meralco said customers can apply for waiver of generation charges in October as the collection of deferred WESM amounts ends this month.
In June, the ERC ordered the collection of fees associated with WESM purchases to be spread over a four-month period to mitigate the impact of high generation rates.
However, the power distributor said the Malampaya prices under the new gas sales and purchase agreements (GSPA) of First Gas power stations will be implemented from the delivery month of September, which will be reflected in the October billing, under the ERC’s directive.
Lawrence S. Fernandez, Meralco’s vice president and chief utility officer, said implementation of the new GSPA will likely result in a 40 centavo per kilowatt increase in energy costs.
The company added that the cost difference between the old and new GSPAs through the August delivery month will be offset over a twelve-month period, starting with next month’s billing.
Meralco also anticipates the possible impact of the remaining 70% of the amount due on reserve market transactions for the billing month of March.
However, Mr Fernandez noted that they are yet to know when the NGCP will start invoicing the remaining reserve market transaction.
Meralco’s controlling stakeholder, Beacon Electric Asset Holdings, Inc., is partially owned by PLDT Inc.
Hastings Holdings, Inc., a part of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc., has an interest in Business world through the Philippine Star Group, which it controls. — Heroes Joy Talavera