MANILA, PHILIPPINES, 7th May 2021 – Two months after reaching the lowest power rate level since August 2017, the Manila Electric Company (MERALCO) announced today a slight upward adjustment this May, as the overall rate for a typical household increased by P0.1853 per kWh, from last month’s P8.4067 to P8.5920 per kWh, as a result of the completion of the refund of over-recovery in pass-through charges. This is equivalent to an increase of around P37 in the total bill of a residential customer consuming 200 kWh.

This month’s overall rate is still lower than last year’s rate by P0.1548 per kWh. This is also the lowest rate for May since 2017.

Increase Tempered by Refund in Meralco’s Distribution Charges

The increase this month was tempered, as MERALCO continues the implementation of the Distribution Rate True-Up refund, which began in March 2021.  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 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.  For residential customers, the refund rate is P0.2761 per kWh and appears in customer bills as a line item called “Dist True-Up”.

Completion of Pass-Through Refunds

MERALCO said it has completed the ERC-approved refund of over-recoveries in pass-through charges, so the corresponding deduction for the refund will no longer appear beginning with the May bill. In an Order released 29 December 2020, the Energy Regulatory Commission (ERC) directed MERALCO to refund over-recoveries in transmission and other charges. MERALCO implemented the ERC-approved adjustments starting January 2021 and completed the refund of over-recoveries last April. The impact to residential customers, from the months of January to April 2021, was a refund of around P0.15 per kWh.

Generation charge inched up in May

Generation charge for May is stable at P4.5474 per kWh, a slight P0.0104 per kWh increase from last month’s P4.5370 per kWh.

Charges from the Power Supply Agreements (PSAs) increased by P0.2541 per kWh due to low dispatch of San Gabriel as a result of the ongoing restriction of Malampaya natural gas supply. Wholesale Electricity Spot Market (WESM) charges also remained high due to tight supply conditions in the Luzon grid as capacity on outage stayed above 3,300 MW and Luzon peak demand in April still exceeded 10,400 MW.  However, these were offset by lower charges from the Independent Power Producers (IPPs), which decreased by P0.1921 per kWh

PSAs provided 52% of MERALCO’s energy requirement while WESM share was down to 7% this month.  IPPs share this month was 41%.

Movements in Other Charges

Transmission charge for residential customers increased by P0.0933 per kWh due to completion of transmission refund coupled with higher ancillary service charges. Taxes and other charges also registered a net increase of P0.0816 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 70 months, after these registered reductions in July 2015. 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, while payment for the transmission charge goes to the NGCP. Taxes and other public policy charges like the Universal Charges and the FIT-All are remitted to the government.

Meralco continues to promote energy efficiency to customers 

Meralco reiterated its call for energy efficiency, as historically, the summer season may bring an increase in residential electricity consumption by 10% to 40% versus average consumption during the cool months of January and February. As temperature increases, appliances that have compressors, like air conditioners or refrigerators, will have to work harder. Electric fans are also used longer than usual, and often at “high” setting to beat the summer heat.

According to Meralco FVP and Chief Commercial Officer Ferdinand O. Geluz, “this summer, you have the power, as Meralco encourages its customers to continue practicing energy efficiency initiatives at home to be ready in managing their consumption.”

Geluz added “these simple everyday activities include cleaning your air con filters every 2 weeks to ensure optimal performance, setting your aircon’s thermostat to 25^oC to maximize efficiency, making sure you use the right aircon size for your room,  making sure your refrigerator’s air vents are not blocked to keep its compressor from working harder, unplugging appliances when not in use to avoid phantom load, using a power strip to make it easier and more convenient to turn appliances off simultaneously with just one switch, and maximizing natural light during daytime.”

For more bright ideas and energy efficiency tips, customers may also visit www.meralco.com.ph/brightideas or follow Meralco on Facebook www.facebook.com/meralco and Instagram: meralcoph.