August 2024 Rates Updates
The Manila Electric Company (Meralco) announced today a minimal upward adjustment of P0.0327 per kWh in the electricity rate for August, resulting in an overall rate of P11.6339 per kWh for a typical household, up from the previous month’s P11.6012 per kWh.
For residential customers consuming 200 kWh, this adjustment translates to an increase of approximately P7 in their total electricity bill.
Transmission charge increase offsets generation charge reduction
This month’s rate adjustment is primarily driven by a P0.1086 per kWh increase in the transmission charge due to higher charges from the grid operator for ancillary services, which are essential for maintaining grid reliability. Ancillary service charges saw a significant rise of over 50%, with charges for contingency and dispatchable reserves doubling. This increase in transmission charges more than offset the P0.0503 per kWh reduction in the generation charge.
Charges from Independent Power Producers (IPPs) decreased by P0.2974 per kWh due to higher IPP dispatch and the appreciation of the Peso, which affected around 97% of IPP costs that are dollar-denominated. This reduction also outweighed the increase in Malampaya natural gas prices following its quarterly repricing.
Wholesale Electricity Spot Market (WESM) prices also fell as Luzon’s average peak demand decreased by 690 MW. The secondary price cap was triggered only 2.3% of the time during the July supply month, compared to 6.6% the previous month. However, effective WESM charges for the month increased by P0.5940 per kWh due to the addition of the third installment of deferred May WESM costs as ordered by the Energy Regulatory Commission (ERC).
Charges from Power Supply Agreements (PSAs) increased by P0.0421 per kWh, primarily due to higher fuel-related costs.
IPPs, WESM, and PSAs accounted for 33%, 27%, and 40% of Meralco’s total energy requirement for the period.
Upcoming changes in generation costs from Malampaya gas
Meralco advises customers to anticipate a potential increase in generation costs from First Gas - Sta. Rita and San Lorenzo, which use Malampaya gas. Following the expiration of the old Gas Sale and Purchase Agreement (GSPA) in July, the supply of Malampaya natural gas to San Lorenzo is now governed by a new GSPA between First Gas and the Malampaya Consortium, similar to Sta. Rita. The pricing formula under the old GSPA continues to apply pending regulatory approval of the new GSPA.
“Once the new GSPAs are approved, they will undoubtedly impact the generation charges for Sta. Rita and San Lorenzo,” said Meralco Vice President and Head of Corporate Communications Joe R. Zaldarriaga.
Other charges
The Universal Charge for Missionary Electrification decreased by P0.0433 per kWh following the completion of the ERC-approved true-up rate recovery.
Meanwhile, taxes and other charges registered a net increase of P0.0177 per kWh.
Pass-through charges for generation and transmission are paid to the power suppliers and the grid operator, respectively, while taxes, universal charges, and Feed-in Tariff Allowance (FIT-All) are remitted to the government.
Meralco’s distribution charge has remained unchanged since the P0.0360 per kWh reduction for a typical residential customer in August 2022.
Improving distribution network resiliency
To enhance the resiliency of its distribution network against severe weather disturbances, Meralco continues to maintain and upgrade its electrical facilities across its franchise area. Alongside routine maintenance, Meralco crews are proactively assessing and upgrading electrical facilities to improve service delivery. Meralco also reminds customers to observe electrical safety during the rainy season. Tips include turning off the main electrical power switch or circuit breaker in case of flooding and ensuring that hands are dry when touching electrical appliances and facilities.
Customers can report power outages and other concerns through Meralco’s official social media accounts on Facebook (www.facebook.com/meralco) and X formerly Twitter (@meralco). They may also text their concerns to 0920-9716211 or 0917-5516211 or contact the Meralco Hotline at 16211 and 8631-1111.
