Meralco rates spike in February

MANILA, Philippines – The Manila Electric Company (Meralco) announced on Tuesday, February 10, that electricity bills are going up this month by P0.84 ($0.019) per kilowatt hour (kWh).

Meralco said all bill components for February have shot up to P10.51 ($0.24) per kWh.

Meralco lowered the electricity bills in January, providing some relief for consumers faced with higher commuter train fares and an increase in water bills.

The upward adjustment also translates to an increase in overall power rates by P168 ($3.79) for Meralco customers with a monthly consumption of 200 kWh; P252 ($5.68) for 300 kWh; P336 ($7.58) for 400 kWh; and P420 ($9.47) for 500 kWh.

The overall P10.51 ($0.24) per kWh rate is still lower compared to rates in February 2014, which was at P11.04 ($0.25) per kWh.

The largest electricity bill component is the generation charge, or the portion of the bill that goes to the generation companies or power producers.

For February, this went up by P0.52 ($0.012) per kWh to P5.24 ($0.12) per kWh.

Why the increase?

The increase in generation charge was mainly due to a P1 ($0.022) per kWh increase in the rates of generation companies under the Power Supply Agreement (PSA), as capacity fees normalized from a low level in the preceding month.    

Generation costs also went up due to the lower dispatch of most generation companies, attributed in part to the lower demand in the January supply month, which covered the Christmas holidays and the 5-day holiday in the National Capital Region.

The January 2015 supply month was likewise cooler compared to the December 2014 supply month. 

The effects of the lower dispatch levels was partly mitigated by lower fuel prices, so that the fuel component from both PSAs and Independent Power Producers (IPPs) went down. For IPP, it went down by P0.08 ($0.002) per kWh.

The higher trading prices in the Wholesale Electricity Spot Market (WESM) were offset by a reduction of billing adjustments from prior months, so that WESM charges registered a net reduction of P1.15 ($0.026) per kWh.

The transmission charge also went up by P 0.12 ($0.003) per kWh to P0.99 ($0.022) per kWh.

The increase in both the wheeling and ancillary charge components of the National Grid Corporation of the Philippines’ (NGCP) billing caused the spike in the transmission charge.

Taxes also went up by around P 0.08 ($0.002) per kWh to P1 ($0.023) per kWh.

Other charges such as system loss charge and lifeline subsidy increased by P 0.08 ($0.002) per kWh to P0.55 ($0.012) per kWh and P0.14 ($0.003) per kWh, respectively.

Distribution charge remained at P2.20 ($0.050) per kWh.

FiT-All charge

The February 2015 billing will also reflect the new FIT-All (Feed in Tariff) charge of P 0.04 ($0.0009) per kWh.

The charge will form part of the fund that the National Transmission Corporation (TransCo) will use to pay FIT-eligible renewable energy (RE) developers for the energy they will produce.

The FIT program is mandated under Section 7 of the Renewable Energy Act of 2008.

Overall, Meralco said this month’s rates are also lower than the average for 2014, which was P10.72 ($0.24) per kWh, Meralco said.

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 such as the plants selling to Meralco through the WESM and under the PSAs and IPPs.

Payment for the transmission charge, meanwhile, goes to the NGCP.

Of the total bill, only the distribution, supply, and metering charges accrue to Meralco. – Rappler.com