March 2023 Rates Updates
The Manila Electric Company (Meralco) announced today an upward adjustment of P0.5453 per kWh in the electricity rate this March, bringing the overall rate for a typical household to P11.4348 per kWh from the previous month’s P10.8895 per kWh.
For residential customers consuming 200 kWh, the adjustment is equivalent to an increase of around P109 in their total electricity bill.
Scheduled maintenance of Malampaya facility triggered generation charge increase
The generation charge went up by P0.4636 to P7.3790 from P6.9154 per kWh the previous month due to higher supply costs, mainly because of the Malampaya gas-to-power facility maintenance shutdown from February 4 to 18.
“This month’s generation charge increase would have been significantly higher, but we took the initiative to cushion the impact in the bills of our customers by coordinating with some of our suppliers to defer collection of portions of their generation costs,” Meralco Head of Regulatory Management Office Atty. Jose Ronald V. Valles said.
Valles added that a total of around P1.1 billion deferred costs reduced this month’s generation rate by about P0.40 per kWh and will be billed on a staggered basis over the next two months or in April and May billing months, as coordinated with the Energy Regulatory Commission (ERC).
Charges from Independent Power Producers (IPPs) increased by P0.5784 per kWh, net of deferred generation costs. The 15-day shutdown of the Malampaya facility compelled the First Gas-Sta. Rita and First Gas-San Lorenzo plants to operate using more expensive alternative fuel to ensure continuity of supply. Also contributing to the increase were Quezon Power’s maintenance shutdown, which was scheduled on January 21 until February 19 to ensure availability during the summer months; and Peso depreciation, which affected 98% of IPP costs that are dollar-denominated. IPPs accounted for 35% of Meralco’s total energy requirement for the period.
Wholesale Electricity Spot Market (WESM) charges were higher by P1.4795 per kWh, resulting from an increase in demand in the Luzon grid. Peak and average demand went up by 457 MW and 675 MW, respectively, while average capacity on outage remained at around 3,800 MW. Due to the tighter supply conditions, the secondary price cap, which was not triggered in January, was imposed 7.06% of the time in the February supply month. Meralco sourced 22% of its total requirement from the WESM during the period, from 16% last month, due to the Energy department-approved scheduled maintenance of the Quezon Power plant and the First NatGas-San Gabriel power plant. San Gabriel’s maintenance outage was scheduled to coincide with the Malampaya shutdown.
Meanwhile, charges from Power Supply Agreements (PSAs) remained generally flat, largely due to the deferral of collection of a portion of PSA costs. PSAs covered the remaining 43% of Meralco’s total requirement in the last supply month.
Transmission and other charges
All other charges, including transmission charge and taxes, registered a net upward adjustment of P0.0817 per kWh. Collection of the P0.0364 Feed-In Tariff Allowance (FIT-All) remains suspended following the issuance of the ERC Resolution extending the suspension for another six (6) months, beginning this March until the August billing month.
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 all remitted to the government.
Meralco’s distribution charge, on the other hand, has not moved since the P0.0360 per kWh reduction for a typical residential customer in August 2022.
The power distributor is still implementing one (1) distribution-related refund, equivalent to P0.8656 per kWh for residential customers, which continues to temper their monthly bills. The final refund is set to be completed by May 2023, impact of which will be felt the succeeding month.
Meralco lays down plans to ensure continuous and reliable service during summer months
Meralco, in close coordination with the Department of Energy and industry stakeholders, has readied measures to ensure the delivery of sufficient and reliable electricity service to customers throughout the summer months when electricity consumption traditionally spikes.
The company is currently working to secure an additional 480 megawatts (MW) of supply to boost its available capacity to address the anticipated increase in power demand.
Meralco is also proactively seeking more participants to join the Interruptible Load Program (ILP), through which it asks big-load customers to use their generator sets instead of drawing power from the grid during instances of Red Alert to help avoid power interruptions. As of end-February 2023, a total of 117 customer accounts with a total committed de-loading capacity of around 560 MW are part of the ILP in the Meralco franchise area.
The public can also help by continuously practicing energy efficiency for better management of their electricity consumption. Meralco assures its 7.6 million customers of its unceasing efforts to secure and deliver sufficient, stable, and reliable power supply not just during the summer months but throughout the entire year.
Customers can report power outages and other concerns to Meralco through its official social media accounts on Facebook and Twitter. They may also text their concerns to 0920-9716211 or 0917-5516211 or contact the Meralco Hotline at 16211 and 8631-1111.