September 2023 Rates Updates
After the combined rate reduction of P1.0121 in the past two months, the Manila Electric Company (Meralco) announced today an upward adjustment of P0.5006 per kWh in the electricity rate this September. With this, overall rate for a typical household is P11.3997 per kWh this month from P10.8991 per kWh in August.
For residential customers consuming 200 kWh, the adjustment is equivalent to an increase of around P100 in their total electricity bill.
Higher generation charge drives overall rate increase
After three consecutive months of decreases totaling P1.2768 per kWh, the generation charge for September went up by P0.4323 to P6.8252 per kWh from P6.3929 per kWh last month due to higher costs from Power Supply Agreements (PSAs) and Independent Power Producers (IPPs).
Charges from PSAs went up by P1.0362 per kWh because of higher fuel prices and the Peso’s depreciation against the U.S. Dollar, which affected around 30% of PSA charges that are dollar denominated.
The same factors also resulted in a P0.4776 per kWh increase in IPP charges. The weakening of the Peso against the U.S. Dollar affected around 98% of IPP costs which are dollar-denominated, while Malampaya gas supply restrictions led to increased use of more expensive alternative fuel by First Gas plants.
PSAs and IPPs accounted for 39% and 36% of Meralco’s total energy requirement for this period, respectively.
Wholesale Electricity Spot Market (WESM) charges, on the other hand, decreased by P0.5034 per kWh, mainly due to reductions in adjustments and other charges. WESM’s share to Meralco’s requirement was 23% this month from 17% the previous month. Sual Power Inc. (SPI) terminated its 330-MW PSA with Meralco effective July 24, 2023, following the Court of Appeals decision on the Energy Regulatory Commission’s (ERC) denial of SPI’s motion for price adjustment. This prompted Meralco to partially source replacement power from the WESM.
Transmission and other charges
Transmission charge for residential customers registered a slight reduction of P0.0081 per kWh. Starting the September billing period, the National Grid Corporation of the Philippines (NGCP) ceased collection of 3% national franchise tax, as directed by the ERC, but this was offset by higher ancillary service charges.
Meanwhile, universal charges also registered a reduction of P0.0239 per kWh following completion of the 12-month recovery of true-up rate under universal charge-missionary electrification. Taxes and other charges increased by P0.1003 per kWh.
Finally, collection of the Feed-In Tariff Allowance (FIT-All), at the rate of P0.0364 per kWh, remains suspended until otherwise lifted by the ERC.
Pass-through charges for generation and transmission are paid by Meralco to the power suppliers and the grid operator, respectively; while taxes, universal charges, and FIT-All are all remitted to the government. Meralco’s distribution charge, meanwhile, has not moved since the P0.0360 per kWh reduction for a typical residential customer beginning August 2022.
Meralco intensifies program to address urban blight
As part of its advocacy to promote public safety, Meralco has ramped up its efforts to address urban blight, particularly the survey and correction of low-sagging wires, removal of illegal wires attached to its poles, and conduct of pole clearing operations.
Meralco also appealed to cable and telco companies to coordinate with the distribution utility and follow the process for wire attachment applications so that these can be properly assessed.
“Illegal wire attachments to our poles pose operational risks and endanger lives. We are appealing to telco and cable companies to secure the necessary approvals before attaching to our facilities. We also ask the public to help promote public safety by reporting incidents of illegal attachments to authorities,” Meralco Vice President and Head of Corporate Communications Joe R. Zaldarriaga said.
Meanwhile, Meralco reminded its qualified customers, particularly beneficiaries of the Pantawid Pamilyang Pilipino Program (4Ps) and other marginalized households, to apply for the lifeline rate program to continue getting discounts on their electricity bills. The government recently moved the full implementation of the program from September 2023 to January 2024.
For more information about the lifeline rate program, customers can visit the Meralco website.
For other concerns including pole problems, and wire theft incidents, customers can report through Meralco’s official social media accounts on Facebook and Twitter as well as via text to 0920-9716211 or 0917-5516211, or contact the Meralco Hotline at (02) 16211.