Meralco Announces Rate Adjustment

The Manila Electric Company (Meralco) has announced an upward adjustment in its electricity rate this July, marking a return to normalized power costs.

Meralco’s recent rate adjustment, emphasizes the company's efforts to ensure a stable and resilient power supply while maintaining reasonable service fees.

This adjustment reflects the recovery from the artificially low rates witnessed last month, with the generation charge increasing by P2.1496 per kWh. Consequently, the overall rate for a typical household has risen to P11.6012 from the previous P9.4516 per kWh.

While this adjustment translates to an increase of approximately P430 for residential customers consuming 200 kWh, it is important to view this development within a broader context of sustainable and reliable energy supply.

The increase stems primarily from the normalization of charges in the Wholesale Electricity Spot Market (WESM), which had previously been kept low through temporary measures.

Meralco's Vice President and Head of Corporate Communications, Joe R. Zaldarriaga, expressed understanding of the impact of the rate adjustment and assured customers of the company's efforts to provide adequate time for bill settlements.

“We again appeal for the understanding of our customers over the delayed bills as we sought guidance from the ERC on the implementation of this month’s rate adjustment. Rest assured that Meralco will adjust the due dates to give our customers enough time to settle their bills,” Zaldarriaga said.

The Energy Regulatory Commission’s (ERC) directive to stagger the collection of deferred charges over several months played a significant role in the July adjustment.

This strategy, aimed at easing the burden on consumers, ensures that the costs from the May supply month are recovered in manageable increments until September 2024. Despite the higher WESM charges, the spot market prices saw a decrease due to a reduction in average demand in the Luzon grid by about 900 MW.

The secondary price cap, which protects consumers from extreme price surges, was only triggered 6.6% of the time this month compared to 19.3% in the previous month.

Furthermore, charges from Independent Power Producers (IPPs) and Power Supply Agreements (PSAs) also saw increases due to higher fuel costs, lower average plant dispatch, and the recovery of deferred costs.

Notably, IPP charges were affected by the forced outage of the San Lorenzo Module 50 for 13 days in June.

On a positive note, the transmission charge has decreased by P0.1550 per kWh, attributed to the absence of reserve market settlement charges. This reduction helps to partially offset the increase in generation charges, ensuring a balanced adjustment in the overall rate.

Meralco assures its customers that the distribution charge remains unchanged since the reduction in August 2022, highlighting the company's commitment to maintaining reasonable service fees.

While the adjustment may pose a temporary challenge, it signifies a step towards a more stable and resilient power supply, ensuring that Meralco can continue to meet the energy needs of its consumers effectively.