MANILA, Philippines: The Manila Electric Co. (Meralco) announced on Friday that there will be a slight upward adjustment of P0.0229 per kilowatt hour (kWh) in the March electricity rate. This brings the overall rate for a typical household to P11.9397 per kWh this month from P11.9168 per kWh in February.
For residential customers consuming 200 kWh, the adjustment is equivalent to an increase of less than P5.00 in their total electricity bill. While this increase may seem minimal, it is important to understand the factors contributing to this adjustment.
Meralco attributes the slight uptick in this month’s overall rate to the P0.3976 per kWh increase in the transmission charge for residential customers. This increase in charges is primarily due to higher ancillary service charges, which now account for around 52 percent of total transmission costs. It is worth noting that the increase in transmission charges effectively offset the reduction in generation charges, resulting in a slight increase in overall rates.
Despite the increase in transmission charges, Meralco was able to mitigate the impact by reducing the generation charge by P0.3518 per kWh. This reduction in charges was primarily due to lower energy payments for power supply agreements (PSAs) and the resumption of operations of the San Buenaventura Power Ltd. Co. (SBPL) power plant after scheduled maintenance.
In addition to the reduction in generation charges, charges from independent power producers (IPPs) and the wholesale electricity spot market (WESM) also decreased. Charges from IPPs decreased by P0.1443 per kWh, reflecting deductions of incremental Malampaya gas costs for First Gas Power Corp. (FGPC)-Sta. Rita under its new gas sale and purchase agreement (GSPA), as directed by the Energy Regulatory Commission. Similarly, charges from the WESM went down by P0.1131 per kWh as the supply situation improved, with average capacity on outage in the Luzon grid decreasing by more than 300MW.
Power supply agreements (PSAs), IPPs, and the WESM accounted for 51 percent, 27 percent, and 22 percent, respectively, of Meralco’s total energy requirement for this period. These various sources contribute to the overall energy mix and determine the rates charged to customers.
It is important to note that Meralco’s distribution charge has remained unchanged since the P0.0360 per kWh reduction for a typical residential customer beginning August 2022. This means that the distribution charge component of the electricity bill has not contributed to the recent adjustment in rates.
Meralco clarifies that pass-through charges for generation and transmission are paid by them to the power suppliers and the grid operator, respectively, while taxes, universal charges, and the Feed-In Tariff Allowance or FIT-All are remitted to the government. Understanding these different charges helps provide transparency and clarity regarding the breakdown of the electricity bill.
While any increase in electricity rates may cause concern for consumers, it is important to consider the various factors that contribute to these adjustments. Meralco’s efforts to mitigate the impact of increased transmission charges through reductions in generation charges demonstrate their commitment to providing affordable and reliable electricity to their customers.
As we move forward, it is crucial for consumers to stay informed about the factors affecting electricity rates and to explore ways to conserve energy and reduce consumption. By being mindful of our energy usage, we can contribute to a more sustainable and cost-effective energy future.
Source: The Manila Times
