After Two Straight Months of Reduction, Power Rates Go Up In July
MANILA, PHILIPPINES, 6TH July 2018 – The Manila Electric Company (MERALCO) announced today that after two consecutive months of reductions, overall electricity rates will increase by PhP0.3136 per kWh this month. For a typical household consuming 200kWh, this will mean an increase of around P63 in their total bill.
The higher July rate is mainly due to the PhP0.2823 per kWh increase in generation charge.
The adjustment now brings the overall rate to PhP10.1925 per kWh from June’s PhP9.8789 per kWh.
Peso Depreciation and higher WESM charges bring up the generation charge
From PhP4.9828 per kWh in June, the generation charge for this month will go up to PhP5.2651 per kWh.
The increase is the result of P0.3573 per kWh rise in the cost of power from Independent Power Producers (IPPs) due to continued Peso depreciation and lower average plant dispatch. Around 96% of IPP charges are dollar-denominated. The share of IPP purchases to Meralco’s total requirement this month was 38%.
Charges from the Wholesale Electricity Spot Market (WESM) also increased by PhP0.7039 per kWh due to higher WESM prices. As demand for power in the Luzon grid reached a record high of 10,876 MW in the June supply month, the National Grid Corporation of the Philippines (NGCP) declared Yellow Alerts from May 29 to June 1 and on June 4 due to insufficient reserves. Tight supply conditions likewise persisted in the second half of the month with more generating capacity on outage.
Meanwhile, weakening of Peso against the US dollar also resulted to a P0.1513 per kWh increase in the cost of power from Power Supply Agreements (PSAs). Around 63% of PSA charges are dollar-denominated. The shares of WESM and PSAs purchases to Meralco’s total requirement this month were 13% and 49%, respectively.
Other Charges increase
Transmission charge to residential customers was stable, while taxes and other charges went up by PhP0.0309 per kWh this month as a result of the higher generation charge.
Meralco’s distribution, supply, and metering charges, meanwhile, have remained unchanged for 36 months, after these registered reductions in July 2015. Meralco reiterated that it does not earn from the pass-through charges, such as the generation and transmission charges. Payment for the generation charge goes to the power suppliers, while payment for the transmission charge goes to the NGCP. Taxes and other public policy charges like the FIT-All rate are remitted to the government.
Meralco provides energy efficiency tips for customers
Meralco once again encourages its customers to still continue practicing energy efficiency initiatives to help manage their electricity consumption. These include everyday household tips that may help save energy, such as: (i) unplugging appliances when not in use to avoid “phantom load”, (ii) using the aircon at mid-setting or at 25 degrees Celsius for maximum efficiency, (iii) using a power board or strip which can supply power to several appliances at once and allows a user to conveniently turn them off simultaneously with just one switch, and (iv) maximizing natural light during daytime and keeping appliances well maintained to ensure optimal performance. For more helpful tips, customers may visit Meralco’s website at www.meralco.com.ph or its social media accounts, twitter @meralco and facebook at www.facebook.com/meralco.