HIGHER TRANSMISSION CHARGE DRIVES AUGUST RATES UPWARD
MANILA, PHILIPPINES, 9th August 2021 – The Manila Electric Company (MERALCO) announced that there will be a slight upward adjustment this August, as the overall rate for a typical household increased by P0.0965 per kWh, from last month’s P8.9071 to P9.0036 per kWh, mainly as a result of a higher transmission charge. This is equivalent to an increase of around P19 in the total bill of a residential customer consuming 200 kWh.
This month’s rate is still lower than the pre-pandemic rate—when it settled at P9.5674 in August 2019 and P10.2190 in August 2018—proof that the series of competitive biddings by MERALCO resulted in lower electricity charges.
It also marks a 13-percent decrease from the P10.3467 rate registered in the same month a decade ago.
Higher Transmission Charge due to increase in Ancillary Service Charges
The transmission charge for residential customers increased by P0.1331 per kWh from P0.5992 in July to P0.7323 per kWh this month due to higher ancillary service charges, which accounted for about 36% of the National Grid Corporation of the Philippines’ (NGCP) total transmission charge.
Distribution True Up Refund Temper Increase
Higher rates were tempered by MERALCO’s continued implementation of the Distribution Rate True-Up refund, which began in March 2021.
The refund rate for residential customers is at P0.2761 per kWh and appears in customer bills as a line item called “Dist True-Up.”
It can be recalled that 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. This amount represented 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.
Generation Charge Inched Up this August
The generation charge for August registered a slight increase of P0.0615 per kWh from P4.8707 last month to P4.9322 per kWh this month.
Charges from the Independent Power Producers (IPPs) went up by P0.7389 per kWh. This can be partly attributed to the continued Peso depreciation, as dollar-denominated charges account for around 95% of IPP costs. IPP charges also increased due to higher Malampaya natural gas prices, following its quarterly repricing to reflect increases in world crude oil prices.
The increase in IPP charges was mitigated by the decrease in charges of Power Supply Agreements (PSA) and the Wholesale Electricity Spot Market (WESM), which registered reductions of P0.0347 and P2.6903 per kWh, respectively. PSA charges decreased due to higher excess energy deliveries of AC Energy plants which are priced at a discount.
WESM prices remained high in the first half of July due to tight supply conditions in Luzon, leading NGCP to declare a Yellow Alert on July 13. High WESM prices triggered the imposition of the secondary prices cap 6.48% of the time. However, WESM prices decreased in the second half, as power situation in the grid improved with cooler temperature and improved availability of generating plants.
For the said period, PSA, IPP, and WESM provided 53.0%, 40.8%, and 6.2% of MERALCO’s energy requirements, respectively.
Reductions in Other Charges
The slight increase in the Generation Charge was more than offset by lower subsidies, taxes, and other charges, which decreased by P0.0981 per kWh.
Meanwhile, collection of the Universal Charge-Environmental Charge amounting to P0.0025 per kWh remains suspended, as directed by the ERC.
MERALCO’s distribution, supply, and metering charges, meanwhile, have remained unchanged for 73 months, after recording reductions in July 2015. MERALCO reiterated that it does not earn from the pass-through charges, such as the generation and transmission charges, as payments go to the power suppliers and the system operator, respectively. Meanwhile, taxes, universal charges and the FIT-All are remitted to the government.
No Disconnection on ECQ, MECQ Areas
Meralco customers who are unable to pay their electricity bills in areas under enhanced community quarantine (ECQ) and modified ECQ (MECQ) can heave a sigh of relief after the company announced that it has suspended disconnection activities in its franchise areas, namely NCR until August 20, and in Laguna, Cavite, Rizal, and Lucena City in Quezon until August 15.
“Given the most recent announcement of the Government placing the Cavite, Rizal, and Laguna region under MECQ from August 6 to 15, all disconnection activities in the said areas will also be suspended to help ease the burden of our customers with the needed relief and additional time to settle their bills,” said Ferdinand O. Geluz, Meralco FVP and Chief Commercial Officer.
Meralco continues to promote energy efficiency to customers
With the typhoon season now on, Meralco continues to encourage customers to practice safety tips and energy efficiency.
These include ensuring that circuit breakers are off amid flooding, keeping yourselves dry at all times before touching any electrical facility, unplugging appliances, removing mud and dirt from service equipment with rubber gloves and rubber-soled shoes, ensuring all electrical wires and devices are dry, and having wiring systems checked by a licensed electrician.
Meanwhile, customers can save energy consumption with several tips such as cleaning air con filters every two weeks, making sure that the proper aircon capacity is used, preventing refrigerators’ air vents from getting blocked, unplugging appliances when not in use, using a power strip to make it more convenient in turning off appliances, and maximizing natural light during daytime.