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Meralco announces power rate hike

THE Manila Electric Company (Meralco) announced a power rate increase for this month.

In a statement on Friday, Meralco said the slight upward adjustment of power rates as the overall rate for a typical household increased by P0.2744 per kWh, from last month’s P8.4753 per kWh to P8.7497 per kWh this January.

This is equivalent to an increase of around P55 in the total bill of residential customers consuming 200 kWh.

Despite the increase, this month’s overall rate is still more than P0.70 per kWh lower than January 2020’s rate of P9.4523 per kWh.

Mitigating this month’s rate increase is the inclusion of ERC-approved adjustments for Meralco’s pass-through over/under-recoveries for the period January 2017 to December 2019.

In an order released 29 December 2020, ERC directed Meralco to refund over-recoveries in transmission and other charges over a period of approximately three (3) months until fully refunded and to collect an under-recovery in the generation rate for approximately twenty-four (24) months until fully collected. The initial impact to residential customers is a net refund of around P0.1150 per kWh.

Overall rate increase mainly brought about by higher generation charge January 2021 generation charge is P4.4574 per kWh, P0.3058 higher than December’s generation charge of P4.1516 per kWh. This month’s generation charge is still lower than last year’s rate of P4.9039 per kWh.

PSA and IPP rates increased by P0.2723 and P0.2428 per kWh, respectively, as Luzon peak demand in December decreased by 252 MW, from 9,886 MW to 9,634 MW due to cooler temperature and more non-working holidays compared to November. Similarly, the demand for power in Meralco ’s franchise in December fell to its lowest level since lifting of the ECQ in May. Lower demand led to fixed costs from power suppliers being spread over lower energy volume, resulting in higher effective generation rates to consumers. Meanwhile, WESM rate decreased by P0.6135 per kWh.

Transmission charge for residential customers registered a reduction of P0.0236 per kWh due to the refund of transmission over-recoveries, while taxes and other charges registered a net decrease of P0.0078 per kWh, despite the recently approved increase in Feed-in Tariff Allowance (FIT-All).

In a decision released last 29 December 2020, the ERC authorized the collection of a FIT-All of P0.0983 per kWh effective in the January 2021 billing cycle. This resulted in a P0.0488 per kWh increase in the FIT-All this month, from the previously approved FIT-All of P0.0495 per kWh.

Meanwhile, collection of the Universal Charge-Environmental Charge amounting to P0.0025 per kWh remains suspended, as directed by the ERC.

Meralco ’s distribution, supply, and metering charges, meanwhile, have remained unchanged for 66 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 Universal Charges and the FIT-All are remitted to the government.