a group of items on display: Power rates up this month ? STAR/File Power rates up this month

MANILA, Philippines — Power rates increased slightly this month, due largely to higher wholesale electricity spot market (WESM) prices, the Manila Electric Co. said yesterday.

Joe Zaldarriaga, Meralco vice president and head of corporate communications, said at a virtual briefing that the overall rate for a typical household increased by P0.0798 per kilowatt-hour from last month’s P8.5920 per kwh to P8.6718 per kwh.

He said this was equivalent to an increase of P16 in the total bill of a residential customer consuming 200 kwh, P24 for those consuming 300 kwh, P32 for 400 kwh and P40 for 500 kwh.

Zaldarriaga said this month’s overall rate is still lower than last year’s rate by P0.0534 per kwh, and is also the lowest rate for June since 2018.

This month’s generation charge rose by P0.0697 per kwh from P4.5474 per kwh to P4.6171 due to higher WESM charges.

WESM charges increased by P1.6322 per kwh due to tight supply conditions in the Luzon grid.

Two factors that pushed up WESM charges are the increase in Luzon demand and the simultaneous generation plant outages, Meralco VP and head of utility economics Lawrence Fernandez said.

With the increase in temperature and economic activity, demand in the grid increased by 1,131 megawatts from 10,425 MW in April to 11,556 MW in May.

The Luzon grid was placed on yellow alert on May 5 due to insufficient operating reserves as average capacity on outage remained at the 3,000 MW level. In the same period last year, capacity on outage was around 2,700 MW.

As a result, WESM prices were persistently high for extended periods, triggering the imposition of a secondary price cap on May 4 to 7 and then again on May 20 to 22.

“Triggering of the secondary price cap indicates that spot market prices were consistently high for several days,” Fernandez said.

However, the increase in WESM charges was mitigated by the lower charges from the power supply agreements (PSAs) and independent power producers (IPPs), which decreased by P0.0476 per kwh and P0.0037 per kwh, respectively.

“The reduction in the PSA and IPP charges were brought about mainly by the improved utilization of power plants plus the appreciation of Philippine peso. From P48.10, the peso appreciated to P47.70,” Fernandez said.

PSAs and IPPs provided 52 percent and 42 percent of Meralco’s energy requirement this month, respectively.? Meanwhile, the share of WESM further declined to six percent.

In terms of other bill components, transmission charge, taxes and other charges for residential customers also registered a slight increase of P0.0101 per kwh.

Meanwhile, collection of the universal charge-environmental charge amounting to P0.0025 per kwh remains suspended, as directed by the Energy Regulatory Commission (ERC).

Meralco’s distribution, supply and metering charges, meanwhile, have remained unchanged for 71 months, after reductions in July 2015.

The increase in this month’s electricity rates was tempered by the refund in Meralco’s distribution rate true-up, which began last March. The refund rate for residential customers is P0.2761 per kwh as “Dist True-Up” in their bills.

The ERC provisionally approved Meralco’s proposal to refund around P13.9 billion over a period of 24 months or until the amount is fully refunded. The amount represents the difference between the Actual Weighted Average Tariff and the ERC-approved Interim Average Rate for distribution-related charges for the period July 2015 to November 2020.

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