The Manila Electric Co. (Meralco) said on Tuesday there would be a slight increase in electricity rates because of an uptick in power generation costs.

Electricity rates for a typical household consuming at least 200 kilowatt-hours (kWh) increased to P9.0862 per kWh this October from last month’s P9.0414 per kWh. The increase of P0.0488 per kWh will mean a hike of P9 in the typical household’s total bill.

In a statement, Meralco said that even with the slight increase this month, following five straight months of decreases, there was a total
downward adjustment of electricity rates amounting to almost P1.47 per kWh since April 2019.

From P4.5191 per kWh last month, the generation charge for October increased to P4.5406 per kWh, due to a smaller Net Settlement Surplus (NSS) refund for October from the Wholesale Electricity Spot market (WESM).

WESM charges decreased by P0.5290 per kWh, driven by an improved power supply situation in the Luzon grid as there were fewer
plants on outage during the supply month.

WESM charges this month also included the second installment of the NSS refund, as directed by the Energy Regulatory Commission (ERC) in an order dated Aug. 1,2019. It may be recalled that the power rate reduction last September was partially due to an NSS refund of P684 million. For the month of October, the NSS refund was smaller, at P381 million.

The share of WESM to Meralco’s supply needs remained at 17%.

The cost of power from independent power producers (IPPs) decreased by P0.1512 per kWh due to the strengthening of the peso against the US dollar. About 97 percent of IPPs’ costs are dollar-denominated.

These partly offset power supply agreement (PSA) charges, which increased by P0.3694 per kWh mainly due to lower average plant dispatch.

IPPs and PSA’s provided 40 percent and 43 percent of Meralco’s supply needs, respectively.

This month, Meralco said, the transmission charge for residential customers slightly increased by P0.0249 per kWh as a result of higher ancillary service charges. Taxes and other charges decreased by P0.0016 per kWh.

Meralco’s distribution, supply, and metering charges have remained unchanged for 51 months, after reductions in July 2015.

Meralco said it did not earn from pass-through generation and transmission charges. Payment for the generation charge goes to the power
suppliers and payment for the transmission charge goes to the National Grid Corp. of the Philippines. (Melo M. Acuña)

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