ELECTRICITY COST. Electricity prices in the Philippines remain among the highest in the region. Photo from AFP

MANILA, Philippines - Over 4 million residential customers of Manila Electric Co. (Meralco) mainly in Metro Manila can expect their bills to shoot up this month because of higher generation charges.

Electricity bills will increase by roughly P0.36 per kilowatt-hour (kWh). That's "about 3% across the board," Meralco's Assistant Vice President of Utility Economics Larry Fernandez told Rappler.

Fernandez said the increase will apply to all consumers, except the "lifeline" ones or those who consume 100 kWh or less per month.

This means a household that consumes about 200 kWh a month will pay P72 more this January.

Fernandez broke down the price increase as follows:

• 50 kWh household - 8.74 peso increase
• 70 kWh household - 16.11 peso increase
• 100 kWh household - 28.55 peso increase
• 200 kWh household - 71.93 peso increase
• 201 kWh household and above multiply .3597 by kilowatt-hours consumed

The hike is the result of higher generation charges, which went up by P0.31.

The utility explained that it does not earn from such charges, which are imposed by power suppliers and passed on directly to consumers.

"The one that really caused the [increase] was the National Power Corp. rate," said Fernandez, who explained that the state-owned company squeezed the collections for a higher Generation Rate Adjustment Mechanism Deferred Accounting Adjustment into a shorter period. The payment which was expected to be spread out over 55 months, will now have to be recovered in just 36 months starting November of 2012.

Asked about how long customers will feel the effects of the tightened payment collection, Fernandez said, "We can't really say if it will continue to increase or stay the same."

"Last month we announced a 31 centavo reduction because there was also a reduction in NTC fee to Meralco, but this month we announced an increase of 36 again primarily because of the NTC, so we'll have to see next month," he said. - Rappler.com